COVID-19 & Tax Time

Government Support payments relating to COVID-19

If you received a government grant, payment or stimulus relating to COVID-19 during the 2021/22 financial year you may have tax implications. These payments include:

1.    COVID-19 Disaster Payment – non-assessable income

2.    Pandemic Leave disaster Payment – assessable income

COVID-19 Disaster Payment

The COVID-19 disaster payment was paid to individuals that were unable to earn income due to state/ territory health orders preventing them for working their usual employment. This may include hospitality works who were unable to work due to trading restrictions. This income is non-assessable income and does not need to be included in your 2021/22 tax return.

Pandemic Leave Disaster Payment

The Pandemic Leave Disaster Payment was paid to individuals who were unable to earn income due to self-isolation or quarantine or because they were caring for someone with COVID-19. This income is assessable income and needs to be included in your 2021/22 tax return.

Working from home during COVID-19

You may be entitled to claim a working from home deduction in your tax return if you have had to work from home due to COVID-19. You can claim all working from home hours, during the 2021/22 financial year, at an hourly rate of $0.80 using the “shortcut” method. This method generally covers the work portion of expenses such as phone use, internet access, electricity and decline in value of office equipment and furniture. If using the shortcut method, you cannot claim any other working from home expenses even if you purchased new equipment.

Protective items, equipment and products

You may be able to claim PPE related to COVID-19 during the 2021/22 financial year such as a face mask if:

1.    Your employment duties require your workplace to wear a mask

2.    Masks have not been provided by your place of employment

You may also be able to claim other PPE items such as gloves and sanitizer if your work-related duties bring you in close contact with customers or you are required to clean premises. Some of the most common industries that may be able to claim these PPE items include the cleaning industry, retail and hospitality.

To claim these as deductions you are required to have record of your purchase and have not been reimbursed by your employer.

COVID-19 vaccination incentives and rewards for employees

If your employer provided any incentives or rewards for vaccinations you may need to include this as assessable income. If you received a cash payment or paid leave you must declare this as income on your tax return, this will usually be included on your income statement and you will have been taxed for the amount; however, it is important to review this and ensure it has been declared as income. If you received a non-cash benefit such as a voucher you do not have to declare this as income in your tax return.

Expenses you may incur

If you incurred any transport expenses getting your COVID-19 vaccination you are not able to claim any of these as a deduction. These expenses are private in nature and not incurred in carrying out your employment duties regardless if the vaccination is a condition of your employment.

For more information visit the ATO.