INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-20 - TAX OFFSETS  

Division 63 - Common rules for tax offsets  

Guide to Division 63  

SECTION 63-10   Priority rules  

63-10(1)  


If you have one or more *tax offsets for an income year, apply them against your basic income tax liability in the order shown in the table. To the extent that an amount of a tax offset remains, the table tells you what happens to it.


Order of applying tax offsets
Item Tax offset What happens to any excess
5 *Tax offset under section 160AAAA of the Income Tax Assessment Act 1936 (tax offset for low income aged persons and pensioners) Your entitlement to it is transferred in accordance with regulations made under that Act
10 *Tax offset under section 160AAAB of the Income Tax Assessment Act 1936 (tax offset for low income aged persons and pensioners - trustee assessed under section 98) Your entitlement to it is transferred in accordance with regulations made under that Act
15 *Tax offset under section 160AAA of the Income Tax Assessment Act 1936 (tax offset in respect of certain benefits) Your entitlement to it is transferred in accordance with regulations made under that Act
17 *Tax offset under section 159N of the Income Tax Assessment Act 1936 (rebate for certain low-income taxpayers) You cannot get a refund of it, you cannot transfer it and you cannot carry it forward to a later income year
20 Any *tax offset not covered by another item in this table You cannot get a refund of it, you cannot transfer it and you cannot carry it forward to a later income year
22 *Tax offset for *foreign income tax under Division 770 Apply it against your liability (if any) to pay *Medicare levy for the income year.
To the extent that an amount of it remains, apply it against your liability (if any) to pay *Medicare levy (fringe benefits) surcharge for the income year.
To the extent that an amount of it remains, you cannot get a refund of it, you cannot transfer it and you cannot carry it forward to a later income year
25 Child care *tax offset under Subdivision 61-IA You may transfer your entitlement to it to your *spouse (under sections 61-496 and 61-497)
30 Landcare and water facility *tax offset under the former Subdivision 388-A You may carry it forward to a later income year (under Division 65)
32 ESVCLP *tax offset under Subdivision 61-P You may carry it forward to a later income year (under Division 65)
33 *Tax offset under Subdivision 360-A (about early stage investors in innovation companies) You may carry it forward to a later income year (under Division 65)
35 A *tax offset under Division 355 (about R & D) that is not covered by section 67-30 You may carry it forward to a later income year (under Division 65)
40 *Tax offset that is subject to the refundable tax offset rules (see Division 67) You can get a refund of the remaining amount
45 *Tax offset arising from payment of *franking deficit tax (see section 205-70) You may carry it forward to a later income year (under section 205-70)

Note 1:

Section 13-1 lists tax offsets.

Note 2:

Former Division 388 was repealed by the New Business Tax System (Capital Allowances - Transitional and Consequential) Act 2001 .

Note 3:

(Repealed by No 143 of 2007 )

Note 4:

The remaining amount of a carry forward tax offset may be reduced by section 65-30 or 65-35 to take account of net exempt income.

Note 5:

Tax offsets mentioned in items 5 and 10 are more commonly referred to as the Senior Australians Tax Offset.

Note 6:

Rules about applying the rebate for certain low-income taxpayers are set out in subsection 159N(4) of the Income Tax Assessment Act 1936 .

Note 7:

Item 17 of the table will be repealed on 1 July 2024 by the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018 .

63-10(2)  
Within each item, apply the tax offsets in the order in which they arose.

Note:

This would be relevant if you have carry forward tax offsets of the same category for different income years.



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