ATO says home schooling expenses can’t be claimed as tax deductions

Parents across Australia are now working from home while home schooling their children – but don’t expect any relief this tax time.

Countless Aussie parents are juggling working-from-home pressures and the stress of educating their kids at home during the coronavirus isolation period.

But while many families may have racked up extra expenses related to home schooling their children, the Australian Taxation Office (ATO) has revealed they will remain out of pocket.

That’s because home schooling expenses can’t be claimed as tax deductions even in this unprecedented situation.

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An ATO spokesman told news.com.au that Australian parents would not be able to add those extra educational costs – such as electronic equipment or office furniture – to their tax return this year.

“The ATO understands that family and community are most important right now, and that in response to COVID-19, many people may be working from home,” the spokesman said.

“If you are an employee who is working from home, you can only claim a deduction for expenses that are directly related to your work.”

The spokesman said there were three rules for an expense to be deductible – you must have paid for it yourself and not been reimbursed by your employer or anyone else, it must be directly related to earning your income, and not a personal expense, and you need to have a record to prove your claim.

Unfortunately, expenses relating to schooling your kids from home in light of the pandemic will be entirely at your own expense.

“Personal expenses like costs related to your children or their education including setting them up to do online learning, teaching them at home and purchasing things like sporting equipment, iPads and desks for children to use in their online schooling are not deductible, even during these challenging times,” the ATO spokesman said.

“This means, you cannot claim a deduction for these kinds of expenses.”

Home schooling expenses won’t be accepted as tax deductions. Picture: iStock

However, the ATO has recently revealed special arrangements in place this year due to the COVID-19 outbreak that are designed to make it easier for people to claim deductions for working from home.

The new arrangements will allow people to claim a rate of 80 cents per hour for all their running expenses, rather than calculating costs for specific running expenses as normally required.

Multiple people living in the same house can claim this new rate individually, and it is no longer a requirement to have a dedicated work-from-home area in order to claim.

Assistant Commissioner Karen Foat said last week the new shortcut method – which will be in place from March 1 to June 30 – will make it easier for those who are working from home for the first time.

“The shortcut method provides a rate of 80 cents per hour and will only require you to keep a record of the number of hours worked from home,” Ms Foat said.

“This recognises that many taxpayers are working from home for the first time and makes claiming a deduction much easier.

“If you choose to use this shortcut method, all you need to do is keep a record of the hours you worked from home as evidence of your claim.”

Claims for working from home expenses prior to March 1 can’t be calculated using the shortcut method and must use the pre-existing working-from-home approach and requirements.

The ATO will review the special arrangement for the next financial year as the COVID-19 situation progresses.

For more information visit the ATO website.