Home Office Tax “Shortcut” & Free Childcare Announced

Art Teacher Working with Children

With COVID-19, working from home expenses have increased considerably and the ATO have recognised this by announcing a new simplified ‘shortcut method’ this week for individuals to claim all overall running expenses.

The new way you can choose to calculate your overall additional running expenses is called the ‘Shortcut method’ which is an 80 cents per hour of work completed from home tax deduction. This is an easier option rather than needing to calculate costs for specific running expenses, keeping track of receipts and the requirement to have a dedicated work from home area has also been removed.

This method is applicable for the period starting 1st of March until 30th of June this year, with the possibility of this to be extended given a review of the health pandemic situation and work patterns later in the year.

What can I claim?

If you are required to work from home remotely due to COVID-19, you will be allowed to claim an 80 cents per hour deduction for the additional running expenses incurred, which includes the following:

  • Electricity and/or gas for lighting, cooling or heating and running electronic items used for work purposes such as your computer.
  • the decline in value and repair of home office furniture and furnishings
  • cleaning costs for your dedicated work area
  • Phone costs, including the decline in value of your handset
  • Internet costs
  • Computer consumables such as printer cartridges, and stationery
  • the decline in value of your computer, laptop or like equipment.

Eligibility Criteria

  1. You are not required to have incurred all the expenses listed above to be eligible to claim a deduction, but you must have incurred additional expenses in some of the categories listed as a result of working from home due to the health pandemic.
  2. Please note if you do use the ‘Shortcut method’ to claim your additional running expenses, you will not be allowed to claim a further deduction for any of the expenses listed above.
  3. Keep in mind you will need to keep record of your time worked from home due to COVID-19 such as dairy notes or timesheets.
  4. Working from home expenses prior to the 1st of March 2020 will need to be calculated using the ‘Fixed rate’ or ‘Actual costs’ method. For more information on how to calculate and claim a deduction under the actual cost method or fixed rate method see our Home office blog.

If you would like to know more about other possible tax deductions you may be eligible to, you should visit our page where you will find numerous blog pieces for reading material over the long weekend.

If you require assistance with your tax affairs or have a general tax query, you can contact our tax guru Ashley via email at [email protected]

Free Childcare Relief for Parents

Further to the new WFH tax relief strategy, Scott Morrison announced late last week that childcare will be free as of the 6th of April in a bid to keep childcare centres opens and accessible to all Australians.

Who is eligible? All families who use Early Learning Childcare centres no matter your profession and current employment status.

This announcement has been issued with the hope of helping support essential workers, making WFH a possibility for individuals required to work remotely and to ease the household budget strain with unemployment increasing.

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