A taxpayer is entitled to claim a dependent spouse tax offset if they meet certain income tests and conditions.
There have been a number of big changes to this offset in recent years; most notably, from the 2012-13 year, spouses born after 1 July 1952 are no longer eligible for the rebate.
The dependent spouse offset can only be claimed by individuals whose Adjusted Taxable Income (ATI) is $150,000 or less.
How much is the Dependent Spouse Tax Offset?
For the 2012-13 financial year, your spouses’s ATI must be under $9,974 in order to qualify.
The maximum amount of Dependent Tax Offsets are reduced by one dollar for every $4 by which the dependent’s ATI exceeds $282.
Eligibility for Dependent Spouse Tax Offset
In order to claim a dependent spouse tax offset for any period in 2012-13 that you had a spouse you must meet all these conditions:
• your spouse is born on or before 1 July 1952 *
• you maintained your spouse;
• your spouse was a resident;
• you were a resident for tax purposes
• neither you nor your spouse (during any period they were your spouse) was eligible for family tax benefit (FTB) Part B or if one of you was eligible for it, you were eligible at the shared-care rate only
• neither you nor your spouse (during any period they were your spouse) received parental leave pay.
* Generally speaking, a person who maintains a dependent spouse who is an invalid, permanently unable to work or providing care may be able to claim an ‘invalid spouse’ or ‘carer spouse’ tax offset, regardless of the age of the dependent spouse.
Changes to the Dependent Spouse Tax Offset
It was announced in the 2012 Federal Budget that the government has proposed that the 8 dependant rebates, being the following tax offsets:
- invalid spouse
- carer spouse
- housekeeper (with child)
- child housekeeper
- child housekeeper (with child)
- invalid relative, and
be replaced by a single non-refundable offset as from 1 July 2012. At the time of writing the existing legislation still provides for separate rebates for the 2012-13 income year as set out below:
Join the conversation over at the blog post Phasing Out of the Dependent Spouse Tax Offset.
The Taxation Office has an online Spouse Tax Offset Eligibility Tool & Calculator available to help you work out if you can claim the offset and how much of the offset you can claim in your tax return.
If you need to work out an Adjusted Taxable Income (ATI) there’s a calculator for that too. See the Income Tests Calculator at the ATO website.