Education Tax Refund

Overview

The Education Tax Refund (ETR) aims to help families, with children undertaking primary or secondary school studies to meet the costs of school education through assistance with certain education expenses.

Under the Government’s ETR, eligible families will be able to claim:

•  a 50 per cent refundable tax offset every year for up to $794 of eligible expenses for each child undertaking primary school, (that is, a refund of up to $397 per child, per year); and
• a 50 per cent refundable tax offset every year for up to $1,588 of eligible expenses for each child undertaking secondary school (that is, a refund of up to $794 per child, per year).  
  

 

LATEST UPDATE

The Government has changed the Education Tax Refund to include school-approved uniforms, purchased from 1 July 2011.

Items of clothing including hats, footwear and sports uniforms approved by a school as its uniform may be claimed from 1 July 2012.

So from 1 July 2011 start keeping receipts for school uniform items so you can claim them next year.
SCROLL BELOW TO SEE WHAT SCHOOL UNIFORM ITEMS ARE ELIGIBLE]

Eligibility

Those entitled to Family Tax Benefit (FTB) Part A in respect of children undertaking primary or secondary school studies for the relevant financial year are eligible for the ETR.

 

Generally, eligibility is also extended to parents with school children undertaking primary or secondary school studies who would be an eligible child for FTB Part A purposes, but for the fact that they, on the child’s behalf, or the child receives certain payments or allowances, for example:

     

• Youth Allowance;
•  Disability Support Pension;
•  ABSTUDY Living Allowance;
•  Payments under the Veterans’ Children Education Scheme; and
•  Payments under the Military Rehabilitation and Compensation Act 2004.

 School children undertaking secondary school studies and who are independent of their parents may also be eligible.

 

For families who share the care of a child, the ETR entitlement for the child will be shared similarly to the way FTB Part A is shared.

  

The families of students who enter or leave school in any school year will be eligible to claim the ETR for the half of the financial year that the student attended school.

  

For students who transition from primary to secondary school in a single financial year the full ETR, based on the secondary-school rate, can be claimed.

  

Families with home-schooled students can also claim the ETR. To be eligible, students must be registered with the relevant State/Territory Government.

 

 

Eligible expenses 

For the purposes of the ETR, eligible educational expenses are: 

Laptops, home computers and associated costs (including repair and running costs of computer equipment, lease costs, printers and paper), home internet connection; education software; school textbooks and material (including prescribed textbooks, associated learning materials, study guides and stationery); and prescribed trade tools.

 

Eligible expenses that have been incurred by a parent or guardian with more than one child with an ETR entitlement can be pooled and claimed against the children’s combined ETR entitlement, provided that the children all have access to the purchased items.

 

Education expenses in excess of what can be claimed in a financial year (that is, expenses over $1,588 per annum for a secondary school student or $794 for a primary school student) are able to be carried over in the following financial year. Eligible expenses that are not utilised for the purpose of claiming the ETR in the financial year that they occurred or the subsequent financial year will automatically lapse.

 

 

The ETR can not be claimed for educational expenses if a tax deduction is allowed or a Commonwealth Government payment/subsidy is payable in respect of that expense.

 

UPDATE:

As well as the items listed above school-approved uniforms purchased from 1 July 2011 (including hats, footwear and sports uniforms) approved by the school as its uniform can be claimed in the 2011/12 tax year.

What school uniform items will I be eligible to claim in 2011/12?

A: School uniform items purchased from 1 July 2011 need to be distinctive and recognised by the school - but are not limited to items bearing a school crest. For example:

1. A public school has a policy which states that students should wear yellow shirts, blue hats, grey shorts or skirts and black leather shoes to identify the students as attending the school. However, while wearing these colours is strongly encouraged, it is not compulsory. An eligible individual whose child attends the school buys items which fit within this policy from a store unaffiliated with the school. None of the clothing items contain the name of the school or school crest. As the items, including shoes, are approved or recognised as part of a distinctive school outfit and fall under the policy, they would be eligible expenses. This applies irrespective of where the clothing was purchased or the fact the uniform was not mandatory.

2. A school has a dress code where students are required to be dressed in a neat and presentable fashion, but which does not indicate a more specific colour or style that the clothing should take. An eligible individual whose child attends the school buys clothes which they intend to wear to school. The items would not be eligible expenses. While the clothing meets the school’s dress code, they lack the sufficiently distinctive quality of a uniform, and could not identify the child as a student at the school.

Claiming the ETR

Parents can simply claim the refund against eligible education expenses incurred from 1 July 2010, when they complete their 2010-11 income tax return.

 

Parents and eligible independent students who do not ordinarily lodge an income tax return can also claim the refund through the Australian Taxation Office.

 

Evidence to support an ETR claim 

Claimants are expected to retain receipts for the purchases of items for which they intend to claim the ETR.

 

For more information, please contact MTA Tax on: 07 3349 2066.