Claiming deductions for personal super contributions

Claiming deductions for personal super contributions

Have you made personal super contributions in the last financial year? You may be eligible to claim a tax deduction.

In this article, we’ll discuss your eligibility to claim tax deductions, as well as how to make a claim. Let’s jump right into it.

What kind of superannuation contributions are eligible for tax deduction?

You can’t claim a tax deduction on all contributions made to your super fund. For example, funds paid directly to your super by your employer are not eligible. This includes:

  •             Salary sacrifice amounts
  •             The compulsory super guarantee
  •             Employer super contributions detailed on your annual payment report

Any personal super contributions made from your after-tax income, on the other hand, may allow you to claim a deduction. Most commonly, this includes contributions made directly from your bank account to your super fund using income earned from one of the following sources:

  •             Your salary or wages
  •             Personal business income, for example, income earned by freelancers and those that are self-employed
  •             Investments
  •             Government allowances
  •             Trust distributions
  •             Any foreign sources of income

Am I eligible to make a claim?

The ATO outlines a fairly long list of eligibility criteria to help you determine whether or not you are eligible to claim a deduction on your personal super contributions.

Here are some of the essential eligibility criteria:

  •             For contributions made after 1 July 2017, funds were paid into an account that was not one of the following:

–            An untaxed fund, such as a constitutionally protected fund (CPF), that wouldn’t include your contribution in its income

–            A Commonwealth public sector super scheme that you have a beneficial interest in

–            A super fund that notified the ATO before the beginning of the financial year that they have elected to treat member contributions to the super fund as non-deductible

  •             You meet the age restrictions as set out by the ATO for the financial year in question
  •             You have submitted a ‘Notice of intent to claim or vary a deduction for personal contributions’ form
  •             Your fund has received and acknowledged your notice of intent

How to make a claim

If you are eligible and wish to claim a tax deduction for your personal superannuation contributions, the first step is informing your fund of your intention.

Your notice of intent will be approved if:

  •             You are a current member of the fund
  •             The fund holds the contribution
  •             The contribution does not contain any amount covered in a previous notice of intent form
  •             You haven’t applied to split the contribution
  •             The fund hasn’t paid a super income stream using the contribution

If you would like to claim tax deductions on contributions made to multiple funds, you will need to lodge a notice of intent form to each fund separately.

Once the form is approved, you can make a claim.

Will my claim impact my concessional contributions cap?

Yes. If you make an eligible claim, the deduction will count towards your concessional contributions cap. Consider the following before claiming a deduction for your super contributions:

  •             Will you exceed your contribution cap?
  •             Would you benefit from splitting your contributions with your spouse?
  •             Will the claim impact your co-contribution eligibility?

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