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Phasing out of Net Medical Expense Tax Offset

Phasing out of Net Medical Expense Tax Offset

One of the most common questions, and surprises, that taxpayers are finding when lodging their 2015 personal returns is their ineligibility to claim the net medical expense offset.

For majority of taxpayers, 2015 financial year may be the last year they can claim the Net Medical Expenses Tax Offset.

The offset is being phased out by way of two sets of transitional arrangements and is fully repealed by 1st July 2019:

  • From the 2014-15 income year until the end of the 2018-2019 income year: Taxpayers may only claim the Net Medical Expenses Tax Offset for medical expenses that both meet the current definition and eligibility requirements, AND relate to disability aids, attendant care or aged care.
  • For the 2014-15 income year: Taxpayers will be eligible to claim the full range of medical expenses (as defined currently) but only if they have received the offset in both the 2012-2013 and 2013-2014 income years.

Note that taxpayers may not be eligible to receive the offset if other tax offsets have reduced the tax payable to zero.


Contributed by Helene

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