Eligibility for Medical Expenses Tax Offset

Medical Expenses Tax Offset

The net medical expenses tax offset (NMETO) is being phased out.

To be eligible for the NMETO for 2014–15, taxpayers must have received an amount of the NMETO in both of their 2012–13 and 2013–14 income tax assessments.

The eligibility rule for the NMETO does not apply to clients with out-of-pocket medical expenses relating to disability aids, attendant care and aged care. These expenses can continue to be claimed until 30 June 2019 in the Total net medical expenses label.

Meaning of 'received'

‘Received’ means that taxpayers must have had an amount of NMETO greater than zero shown on their notice of assessment, refer to subsection 159P(1C) of the Income Tax Assessment Act 1936.

If taxpayers 2012–13 Notice of Assessment shows an amount of zero for NMETO they wouldn't have received this offset in their income tax assessment and so are not eligible to make a claim in 2013–14 or 2014–15.

Example

Section 63-10 of the Income Tax Assessment Act 1997 requires tax offsets against gross tax to be applied in a priority order. This means that tax offsets including the seniors and pensioners tax offset and the low-income tax offset must be applied before NMETO or other non-refundable tax offsets are considered.

Contact us at A Grade Tax Penrith should you require any further clarification.

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