Private ruling: Dependent spouse tax offset
Published: October 2012
Ruling period: Year ended 30 June 2009 | Year ended 30 June 2010 | Year ended 30 June 2011
Date scheme commenced: 1 July 2008

Ruling: Q1: Are you entitled to claim a dependent spouse tax offset in the 2008-09, 2009-10 and 2010-11 financial years? | A1: Yes

Relevant facts and circumstances: Your spouse sustained a workplace injury. Your spouse subsequently received fortnightly compensation payments until the 2007-08 financial year when a lump sum payment was made in full settlement of any future claims. You maintained your spouse during the 2008-09, 2009-10 and 2010-11 financial years as compensation payments were no longer being received and your spouse was unable to work due to the workplace injury. Your adjusted taxable income was below $150,000 and your spouse's adjusted taxable income was below the relevant threshold in all of the income years in question. You and your spouse are both residents of Australia for tax purposes, and you did not receive Family Tax Benefit Part B.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 159J

Reasons for decision: Summary: A resident taxpayer that contributes to the maintenance of a spouse may be entitled to claim a dependent tax offset under section 159J of the Income Tax Assessment Act 1936 (ITAA 1936). To be eligible for a dependent spouse tax offset in the 2008-09 financial year, the following conditions must be fulfilled: · your income must be less than $150,000; · you must contribute to the maintenance of your spouse; · your spouse's separate net income is less than $8,918; and · you and/or your spouse must not be receiving or be eligible to receive Family Tax Benefit Part B. Separate net income (SNI) of your spouse consists of the following: · Assessable income · Certain non-taxable Government payments and benefits · Spousal maintenance received | Detailed Reasoning - less: · Expenses incurred in earning their income that could be claimed as a deduction · Childcare expenses · Travel to and from work · Travel to and from childcare To be eligible for a dependent spouse tax offset in the 2009-10 and 2010-11 financial years, the following conditions must be fulfilled: · your income must be less than $150,000; · you must contribute to the maintenance of your spouse; · your spouse's adjusted taxable income is less than the threshold; and · you and/or your spouse must not be receiving or be eligible to receive Family Tax Benefit Part B. Adjusted taxable income (ATI) of your spouse consists of the following: · Taxable income · Reportable employer superannuation contributions · Deductible superannuation contributions · Tax free Government pensions and benefits · Target foreign income · Net financial investment loss · Net rental property loss · Adjusted fringe benefits | Detailed Reasoning - less: · Child maintenance provided to a third party · The ATI thresholds were $9,254 for the 2009-10 financial year and $9,426 for the 2010-11 financial year. Maintaining a spouse means that: · you and your spouse resided together; or · you gave your spouse food, clothing and lodging; or · you helped your spouse to pay for his or her living, medical and educational costs. In your case, your taxable income is less than $150,000 for all of the income years in question. Your spouse's SNI / ATI is less than the threshold in each of the financial years in question. You have maintained your spouse, and you have not received any Family Tax Benefit Part B. You are therefore eligible to claim a dependent spouse tax offset in the 2008-09, 2009-10 and 2010-11 financial years. | Detailed Reasoning - Additional information: Subsection 159J(4) of the ITAA 1936 states that the amount of the rebate otherwise allowable under this section in respect of a dependant shall be reduced by $1 for every $4 by which the dependant's SNI / ATI for the year of income exceeds $282. If your spouse's SNI / ATI is greater than $282 you will need to adjust the amount of dependent spouse tax offset that you can claim.

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