Low and Middle Income Tax Offset (LMITO)

The Low and Middle Income Tax Offset (LMITO) is a non-refundable tax offset designed to reduce the tax payable by individuals earning up to $126,000 per year. While it can significantly lower your tax bill, it cannot generate a refund if your tax liability is zero.

Key Details About LMITO

Eligibility

• The offset is available to individuals earning up to $126,000 annually.

Maximum Offset

• Eligible individuals earning between $37,001 and $48,000 can receive the maximum benefit of $1,500

Phased Reduction

• The offset gradually decreases for taxable incomes between $48,001 and $126,000

Automatic Application

• The LMITO is automatically calculated and applied by the ATO when you lodge your tax return.

Important Considerations

Income-Tested

• The LMITO is not available if your taxable income exceeds $126,000

Accurate Reporting

• Ensure all taxable income is accurately reported to qualify for the offset.

FAQs

Q: Do I need to apply for the LMITO?

A: No, the LMITO is automatically applied by the ATO when you lodge your tax return if you meet the eligibility criteria.

Q: Can the LMITO result in a refund?

A: No, the LMITO is a non-refundable tax offset. It reduces the amount of tax you owe but does not result in a refund if your tax liability is zero.