Private ruling: Dependant spouse tax offset
Published: December 2011
Ruling period: Income year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to a dependant spouse tax offset? | A1: 

Relevant facts and circumstances: You, your spouse and your child are residents of Australia. Your child finished Year 12 schooling in 20XX and commenced full-time employment in 20XX. Your child lives in the same residence as you and your spouse and, pays board and lodging and all their own personal expenses. Your child is under XX years of age and not a student. Your income for the 20XX-XX financial year was under the $150,000 threshold. Your spouse did not earn any income. Neither you, nor your spouse, received FTB Part B payments in the 20XX-XX financial year. Your child has been in receipt of Youth Allowance since May 20XX.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 159J | Income Tax Assessment Act 1936 Subsection 159J(1A) | Income Tax Assessment Act 1936 Subsection 159J(2)

Reasons for decision: Summary: Section 159J of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a taxpayer is entitled to a tax offset where, during the year of income, they contributed to the maintenance of a dependant who is a resident of Australia. Subsection 159J(2) of the ITAA 1936 lists a spouse, a child less than 21 years of age (not being a student), and a student, as dependants of the taxpayer for this section. However, subsection 159J(1A) provides that a taxpayer is not entitled to a dependant tax offset, under this section, for a child less than 21 years of age (not being a student) or, a student. A taxpayer maintained a dependant if any of the following applied: o you and your dependant lived in the same house o you gave your dependant food, clothing and lodging o you helped them pay for their living, medical and educational costs. o A taxpayer is eligible to claim a dependant spouse tax offset for any period in 2010-2011 financial year that they had a spouse and met all of the following conditions: o you contributed to the maintenance of your spouse. o you and your spouse were Australian residents for tax purposes. o you had adjusted taxable income under $150,000. o your spouse's adjusted taxable income for the year did not exceed the threshold at which the tax offset cuts out ($9,426 for 2010-11), and o you or your spouse were not entitled to Family Tax Benefit (FTB) Part B at the full care rate. In your case, you contributed to the maintenance of your spouse for the full year. You and your spouse were residents of Australia for tax purposes. Your adjusted taxable income was below $150,000. Your spouse did not earn any income. You were not eligible for FTB Part B at any time throughout the year as your child was in receipt of Youth Allowance. As you have met all of the required conditions to claim a dependant spouse tax offset for the 20XX-XX financial year, you are entitled to the full dependant spouse tax offset of $2,286 for the 20XX-XX financial year.

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