COVID-19 support payments were made by State and Federal Governments during the year ended 30 June 2022 to individuals and businesses impacted by COVID-19.
It is important that the COVID-19 support payments are properly disclosed in the 2022 income tax returns of the recipients.
We set out below a guide on the tax treatment of a number of COVID-19 support payments:
| Support Payment | For |
Taxable Yes/No |
Tax Return Treatment |
| COVID-19 Disaster Payments | Individuals | No | Do not include in tax return |
| Pandemic Leave Disaster Payment | Individuals | YES | Include in tax return. |
| Recovery Loans to support Businesses | Businesses | No | Do not include in tax return |
| Payments to support businesses affected by COVID-19 | Businesses | Read more |
Generally will need to be included in the tax return unless the ATO has specified it is non-assessable non-exempt and the recipient satisfies certain criteria. See ATO website for list of non-taxable COVID-19 business support payments. *See comments below. |
| State Government Voucher Subsidy Scheme | Businesses | Yes | Include in tax return |
| Payroll tax relief | Businesses | Read more | Payroll tax relief support provided will generally result in a lower deduction in the tax return. |
| Land tax relief | Businesses | Read more | Land tax relief support provided will generally result in a lower deduction in the tax return. |
| Rent relief | Businesses | Read more | Rent relief support provided will generally result in a lower deduction in the tax return. |
| Electricity Rebates | Businesses | No | Do not include in tax return. Deduction for electricity expenses will be reduced by the rebate. |
| Grants to support the Creative Economy | Businesses | Yes | Include in tax return |
| Concessional loans to support the Creative Economy | Businesses | No | Do not include in tax return |
| Cashflow Boost | Businesses | No | Do not include in tax return. |
*Certain payments to support businesses affected by COVID-19 are not required to be included in a tax return if the business has aggregated turnover of less than $50 million and the ATO has specified it is non-assessable non-exempt.
The following NSW support payments are not required to be included in a tax return provided the other criteria have been met:
- • 2021 COVID-19 business grant
- • 2021 COVID-19 JobSaver payment
- • 2021 COVID-19 micro-business grant
Please contact us to find out how this will impact you or your business.
The team at EMspire Advisory are trusted, qualified Chartered Accountants and work closely with our clients to achieve the best possible outcomes. So to find out more and assist with your tax return, please contact us!
Please note that this information is not specific and is general in nature and cannot be relied on as advice. Please contact us for advice specific to you and your circumstances.