There has been some confusion regarding the Low and Middle Income Tax Offset (LMITO) so we wanted to clarify a few things.
The Low and Middle Income Tax Offset (LMITO) is to help low and middle income earners lower the amount of tax they need to pay. Because it is a tax offset, it can only be used to lower the amount of tax that you owe and not to generate a tax refund or pay your Medicare Levy.
Who’s eligible for LMITO
Your taxable income determines your eligibility for LMITO. If your taxable income is at or below $125,333, you are eligible for some LMITO. You don’t have to apply for LMITO, the ATO will work out if you’re eligible when they assess your tax return.
LMITO income thresholds
The taxable income thresholds below were announced in the 2019 Federal Budget.
These LMITO thresholds apply for the 2018/2019, 2019/2020, 2020/2021 and 2021/2022 years.
| Taxable income | LMITO |
|---|---|
| $37,000 or less | $255 |
| $37,001 to $48,000 | $255 plus 7.5% of the portion of your taxable income that exceeds $37,000 |
| $48,001 to $90,000 | $1,080 |
| $90,001 to $126,000 | $1,080 less 3% of the portion of your taxable income that exceeds $90,000 |
Source: Treasury
