The COVID-19 pandemic has changed the way we all work and as a result may have changed what you can claim as a deduction this tax time.

COVID tests

The Australian Taxation Office (ATO) has confirmed COVID-19 polymerase chain reaction (PCR) and Rapid Antigen Tests (RAT), taken for the purpose of returning to work will be considered tax deductible for Financial Year 22.

Available for employees, sole-traders or contractors, the COVID-19 tests can be claimed under ‘Other work-related expenses’ on an individual’s tax return and includes any RAT or PCR test taken within FY22.

You can only claim the work-related portion of your expense on COVID-19 tests. For example, if you buy a multipack of COVID-19 tests and use some for private purposes (such as by other family members or for leisure activities), you must only claim for the portion of the expense you use for a work-related purpose.

Personal protective equipment (PPE)

You may be able to claim a deduction for the cost of buying a face mask to wear at work if your duties require you and other employees to be at your place of work, a face mask is not provided to you by your employer, or you need to wear a mask because your duties bring you in close contact with other people, including clients, customers or work colleagues.

To claim a deduction for other items of PPE such as gloves, sanitiser or anti-bacterial spray, your work duties must either bring you in close contact with clients or customers or involve you cleaning a premises.

This will usually be people working in medical, cleaning, airline, hairdressing and beauty and retail, cafe and restaurant industries.

To claim a deduction for PPE items, you will need to keep records such as a receipt to prove your claim. You also must not have been reimbursed for the expense.

If your private use of the item is no more than incidental to your protection from the risks you are exposed to while carrying out your work duties, you don't have to apportion the expense.

Working from home

For those who have worked from home, the temporary COVID-19 deduction shortcut enables people to claim a flat rate of 80 cents for every hour they worked from home to cover all extra costs, such as internet and electricity.

The shortcut was brought in 2020, however the deduction is set to end this financial year.

The shortcut method can be claimed by multiple people living under the same roof and, unlike other methods, does not require a dedicated work area.

Taxpayers can also choose to use the fixed-rate or actual cost methods to claim working from home expenses.

To claim a work-related expense

• You must have spent the money yourself and not been reimbursed.
• The expense must be directly related to earning income.
• You must have kept any necessary records such as receipts.
• More information on claiming working from home expenses is available on the ATO website.

Source: ato.gov.au

The information in this article has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in the document is general advice and does not take into account any person's particular investment objectives, financial situation or needs. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives, financial situations and needs.