Your extra coronavirus payments may mean you need to pay tax
14 October 2020
You can ask us to take tax out of your payment to help you avoid an income tax debt.
When you get a payment from us, we don’t automatically take out tax.
Due to coronavirus (COVID-19), we’ve paid some customers extra payments and supplements. If you got any of these, it may affect your tax return for 2020-21.
If you got the fortnightly Coronavirus Supplement, it is taxable income.
This extra money means your taxable income might be above the relevant thresholds. If it is, you may have to lodge a tax return and pay income tax or the Medicare levy, or both.
The Australian Taxation Office (ATO) may reduce the tax you need to pay if you’re eligible for a tax offset. They have offsets that apply when you get certain Australian Government payments or have a low income. But these offsets won’t reduce the amount of Medicare levy you may need to pay.
To avoid owing money to the ATO, you can arrange to have tax taken from your payment. It’s important to think about this if any of the following apply. You:
- get the Coronavirus Supplement
- have earnings as well as your Centrelink payment
- get other taxable income.
The amount of tax you need to have taken out will depend on your circumstances.
You can have tax deducted from your payment. You can set up, update or cancel a tax deduction any time using either your:
If you can’t use online services, you can send us a completed Tax Deduction Authority form.
Read more about personal taxation on the ATO website.
Page last updated: 15 October 2020
This information was printed 18 January 2021 from https://www.servicesaustralia.gov.au/individuals/news/your-extra-coronavirus-payments-may-mean-you-need-pay-tax. It may not include all of the relevant information on this topic. Please consider any relevant site notices at https://www.servicesaustralia.gov.au/individuals/site-notices when using this material.