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Grants and Tax

A common misconception is that government grants and payments are not eligible for tax. Although technically not thought of as ‘income,’ most grants and payments will still need to be detailed in your tax return.

With taxable government payments such as JobKeeper now becoming commonplace, it’s important to understand what is and isn’t relevant for taxation purposes.

Payments or grants that may attract income tax, particularly relevant to COVID-19 are:

  • JobKeeper
  • COVID-19 business subsidies provided by the government to your business to aid continuing through COVID-19.
  • Grants received under the Australian Apprenticeships Incentives Program or similar.
  • Fuel related tax credits or benefits

Other notable payments or grants to include are:

  • Student or youth assistance payments such as Youth Allowance, Newstart and Austudy.
  • JobSeeker and pensions
  • Cashflow boost

Although payments such as these are generally exempt from tax, they still need to be declared in order for the government to understand your financial situation.

If you are uncertain about which payments and grants attract income tax, visit the ATO website.

As BAS agents, we can also help you navigate through any uncertainty. Just get in touch.