How you can claim Covid costs in your upcoming tax return

The Australian Taxation Office has revealed what you can and can’t claim as a Covid expense when you lodge your return.

Australians who paid for a Covid-19 test for work-related purposes will be able to claim back the cost on tax, the Australian Taxation Office (ATO) says.

As the end of financial year (June 30) draws nearer, the ATO is acknowledging another pandemic-marred 12 months has sparked more questions around returns.

But lodging your tax for the 2021-22 financial year can still be a simple process with knowledge of what you can and can’t claim as a Covid cost, ATO assistant commissioner Tim Loh says.

“We know that many have faced significant challenges this year,” Mr Loh said.

The ATO has acknowledged tax time has been complicated by the Covid-19 crisis.

“(But) tax time can be a smooth and easy experience if you know what income you must include and what Covid-19-related expenses you can claim in your tax return.”

Those who paid for a Covid test for work, like determining whether they can attend a shift, can claim a tax deduction for it as long as they have reasonable evidence.

A receipt is typically a taxpayer’s best bet, but bank or credit card statements – or even evidence from an employer – will also be accepted.

“If you purchased a Covid-19 test for a trip with your mates, you can’t claim a deduction,” Mr Loh warned.

Covid tests can only be claimed back if the cost was work-related, Mr Loh has warned. Picture: Supplied

Protective equipment such as face masks and hand sanitiser could be ticked off as tax deductions for employees who were required to spend their working days dealing with customers.

“If you’re spending your working day in proximity to customers and are at risk of contracting Covid-19, you may be able to claim a deduction for protective items such as gloves, face masks or sanitiser,” Mr Loh explained.

“This will be most common in industries such as retail, cleaning and hospitality.”

Government relief payments will also be treated differently by the tax office.

Different relief payments have different tax requirements, the ATO says. Picture: AAP / April Fonti.

JobSeeker payments will be taxable, with information on them to be pre-filled under the government allowances and payments section.

The pandemic leave disaster payment will not be pre-filled, however, with those who received it required to add up all remittance before including a total amount in their tax return.

The government’s Covid disaster payment isn’t taxable and isn’t required to be included in any tax lodgements.

Originally published as How you can claim Covid costs in your upcoming tax return