T4 Zone or overseas forces 2022

Are you entitled to claim for living in a zone or serving in an overseas force?

You may be able to claim this tax offset if you:

• lived in a remote or isolated area of Australia (not including an offshore oil or gas rig) or
• served overseas as a member of the Australian Defence Force or a United Nations armed force.

No	Go to question T5 Invalid and invalid carer 2022, or return to main menu Individual tax return instructions 2022.
Yes	Read on.

Zone tax offset

Eligibility for the zone tax offset is based on your usual place of residence. If your usual place of residence was not in a zone, you are not eligible for the zone tax offset.

 

Remote areas are classed as either Zone A or Zone B. There are also special areas within these zones. If you do not know which zone your area is in, see Australian zone list.

To qualify for the tax offset, your usual place of residence must have been in a remote area (not necessarily continuously) for:

• 183 days or more during 2021–22, or
• 183 days or more during the period 1 July 2020 to 30 June 2022 (including at least one day in 2021–22) and you did not claim a zone tax offset in your 2021 tax return.

If your usual place of residence was in a zone for less than 183 days in 2021–22, you may still be able to claim a tax offset as long as your usual place of residence was in a zone for a continuous period of less than five years after 1 July 2016 and:

• you were unable to claim in the first year because you lived there less than 183 days, and
• the total of the days you lived there in the first year and in 2021–22 is 183 or more. The period you lived in a zone in 2021–22 must include 1 July 2021 (the first day of the income year).

Overseas forces tax offset

You may be eligible for an overseas forces tax offset if you served in a specified overseas locality as a member of the Australian Defence Force or a United Nations armed force in 2021–22 and income relating to that service was not specifically exempt from tax. Periods of service for which your income was ‘exempt foreign employment income’ are excluded in working out your eligibility for the tax offset.

Your employer will be able to advise you whether you served in a locality that qualifies for the overseas forces tax offset. You can also see which localities qualify for the overseas forces tax offset at Current specified localities or phone 13 28 61.

To claim the full tax offset, you must have served in the overseas locality for 183 days or more in 2021–22. If your overseas service was less than 183 days, you may be able to claim part of the tax offset. Unlike the zone tax offset, you cannot carry forward any unused days from previous years to make up 183 days.

If you served in an overseas locality for less than 183 days, but the total number of days served in the overseas locality, when added to the number of days served in one or more zones, is 183 days or more, you may still be entitled to claim the full overseas forces tax offset. If you served as a member of the Australian Defence Force, days spent in a zone must be defence force service.

If you qualify for both an overseas forces tax offset and a zone tax offset, you can claim only one of them. Claim the higher one.

Completing this item

The zone or overseas forces tax offset is made up of:

• a fixed amount
• a base amount.

The fixed amount is a prescribed amount available to all people in the zone or overseas area eligible for the tax offset.

You may be able to include a base amount if you:

• maintained a child under 21 or full-time student under 25, or
• were entitled to claim the Invalid and invalid carer tax offset.

Your fixed and base amounts are determined by your circumstances.

How to work out your tax offset if your circumstances were simple

Step 1

Your tax offset is the amount in Table 1 if:

• your usual place of residence was in only one zone or you served in only one specified overseas locality for at least 183 days
• you are not able to include a base amount as
  • you were not entitled to claim the invalid and invalid carer tax offset
  • you either did not have a dependent child or student at any time in 2021–22, or if you did have a dependent child or student, their adjusted taxable income (ATI) was equal to or greater than $282 plus $28.92 for each week you maintained them.
   

Table 1: Tax offset amounts

Zone A	Zone B	Special area	Overseas forces
$338	$57	$1,173	$338

Child includes your adopted child, stepchild, ex-nuptial child and child of your spouse. See the definition of child in Special circumstances and glossary 2022.

A student must be full-time at a school, college or university.

If you cannot use Table 1 you will need to work through How to work out your tax offset if your circumstances were more complex.

If you received a remote area allowance from Centrelink or the Department of Veterans’ Affairs you must reduce the amount of your zone tax offset by the amount you received for this allowance.

Step 2

Write your tax offset amount less any remote area allowance at R item T4 on page 16 of your tax return. Do not show cents. Go to question T5 Invalid and invalid carer 2022.

How to work out your tax offset if your circumstances were more complex

You can either use our Zone or overseas forces tax offset calculator or see Working out your total base amount.

The following information will help you work out your base amount, if any.

Dependent child or student base amount

Full-year claim

Your base amount will include the maximum amount shown in Table 2 for each student under 25 years old on 30 June 2022 in full-time education at a school, college or university, and for each child under 21 years on 30 June 2022 who, for the whole of 2021–22:

• was treated as an Australian resident
• was maintained by only you, and
• had an ATI of less than $286.

To calculate the ATI see Adjusted taxable income (ATI) for you and your dependants 2022 or use the Income tests calculator.

If you did not have any dependent children or students, go to Invalid and invalid carer base amount.

Table 2: Dependant child or student base amount

Dependant	Base amount
Each student under 25 years old	$376
For the oldest non-student child under 21 years old	$376
Other non-student children under 21 years old	$282 for each child

For the meaning of dependant, see Special circumstances and glossary 2022.

If all of these requirements were met, add up the base amount for each child or student and write the total at row a Worksheet 4.

If two or more people contributed to the maintenance of a dependent child or student, each person can only claim a proportion of the base amount.

For the meaning of maintaining a dependant, see Special circumstances and glossary 2022.

If the requirements were met for only part of the year, or your child’s or student’s ATI for the period you are claiming this base amount in respect of them was $286 or more, you may be able to claim for a part of the base amount. Read on.

Part-year claim

You can claim only part of the base amount for dependent children or students if:

• the child or student was treated as an Australian resident for only part of 2021–22
• the student was under 25 years old and in full-time education for only part of 2021–22
• the child or student was maintained by you for only part of 2021–22
• the child was 21 years old at 30 June 2022 and not in full-time education, or
• the student was 25 years old at 30 June 2022.

Use Worksheet 1 to work out the reduced base amount for each eligible dependent child or student as described in Table 2.

Worksheet 1 – Reduced base amount for eligible dependent child or student

Row	Calculation	Amount
a	Maximum base amount for the child or student from Table 2	$
b	Number of days you maintained your child or student and your child or student was an eligible dependant	days
c	Number of days in 2021–22	365
d	Divide row b by row c.	$
e	Multiply row d by row a.	$

If the ATI of your child or student was less than $286 for the period you are claiming this base amount in respect of them, transfer amount at row e above to row b Worksheet 4.

If you had more than one eligible child or student and the ATI of each one was less than $286 for the period you are claiming this base amount in respect of them, work out the amount for each child and student, add up all the amounts and write the total at row b Worksheet 4.

If ATI was $286 or more for the period you maintained them

You cannot claim any base amount for your child or student if that child or student had an ATI equal to or greater than:

• the total of $282 plus $28.92 for each week you maintained them for a student under 25 years old or for the oldest child under 21 years old who is not a student, or
• the total of $282 plus $21.70 for each week you maintained them for any other child under 21 years old who is not a student.

If your child’s or student’s ATI for the period you are claiming this base amount in respect of them was $286 or more but less than the limits shown, use b to work out the base amount.

Worksheet 2 – Base amount where ATI exceeds $282

Row	Calculation	Amount
a	Base amount for the child or student from Table 2 or row e Worksheet 1 for a part-year claim	$
b	Your child’s or student’s ATI for the period you maintained them	$
c	Income above which the base amount begins to reduce	$282
d	Take row c away from row b.	$
e	Divide row d by 4 because your base amount is reduced by $1 for every $4 of ATI over $282. Do not show cents.	$
f	Take row e away from row a. Show zero (0) if the amount is negative. Do not show cents.	$

Transfer the amount at row f above to row c Worksheet 4. If you had more than one eligible child or student, work out the amount for each child or student, add up all the amounts and write the total at row c Worksheet 4.

Sole parent base amount

If you had sole care of a dependent child or student and you have written an amount of at least $1 in Worksheet 4 at rows a, b or c (base amount for dependent children or students), you may also be eligible for a sole parent base amount.

You can only claim this base amount if you were a sole parent at any time during 2021–22 and:

• your usual place of residence was in a remote area of Australia, or
• you served overseas as a member of the Australian Defence Force.

Sole care means that you alone had full responsibility on a day-to-day basis for the upbringing, welfare and maintenance of a child or student. We do not consider you to have had sole care if you were living with a spouse (married or de facto) during the year unless special circumstances exist.

You will need to use Worksheet 3 to calculate a part-year sole parent base amount claim.

Special circumstances

If you had a spouse (married or de facto) at any time during 2021–22, you are entitled to a sole parent base amount only in special circumstances.

Generally, for special circumstances to exist, you must have been financially responsible for and have had sole care of the dependent child or student, without the support a spouse normally provides.

Examples of situations where special circumstances may arise:

• You were married at any time during 2021–22 but
  • during 2021–22, you then separated from, or were deserted by, your spouse, and
  • for the remainder of 2021–22, you were not in a de facto relationship.
   
• Your spouse was in prison for a sentence of at least 12 months.
• Your spouse was medically certified as being permanently mentally incapable of taking part in caring for your child or student.

If you are unsure whether special circumstances applied, then phone 13 28 61.

Shared or joint custody after a relationship breakdown

There are times, after a relationship breakdown, such as a divorce or separation, where both parents share the custody of a child or student.

If you can show that you had sole care of a dependent child or student for part of the year, you may be able to claim the base amount for that part of the year. This means more than just having access visits with the child or student.

We consider you to have had sole care of the child or student for the part of the year up to the day the child turned 21 years old, or the student turned 25 years old if the dependant:

• was not receiving full-time education and turned 21 years old during 2021–22, or
• was a full-time student and turned 25 years old during 2021–22.

You are only entitled to claim the base amount for that part of the year before the birthday.

If you had sole care of a child or student for the whole of 2021–22, write $1,607 at row d Worksheet 4.

Worksheet 3 – Sole parent base amount, part-year claim

Row	Calculation	Amount
a	Number of days you had sole care of a child or student	days
b	Multiply row a by $4.40.	$

Transfer the amount at row b above to row e Worksheet 4.

Invalid and invalid carer base amount

If you are entitled to a tax offset at T5 Invalid and invalid carer, you are entitled to this base amount.

To work out the base amount you are entitled to claim, you can:

• use our calculator, or
• go to T5 Invalid and invalid carer 2022 to work it out manually.

Then write the amount you worked out above at row f Worksheet 4.

Working out your total base amount

Use Worksheet 4 to work out your total base amount.

Worksheet 4 – Total base amount

Row	Calculation	Amount
a	Dependent children or students, from Table 2	$
b	Dependent children or students, from Worksheet 1	$
c	Dependent children or students, from Worksheet 2	$
d	Sole parent – full year	$
e	Sole parent – part year from Worksheet 3	$
f	Amount claimed at item T5 Invalid and invalid carer tax offset	$
g	Add up all of these amounts.	$

The amount at row g is your total base amount.

Read on.

You use the information from Table 3 below when you complete either Worksheet 5 or Worksheet 6.

Table 3: Zone fixed amount and percentage of base amount

	Fixed amount	Percentage of base amount
Zone A	$338	50%
Zone B	$57	20%
Special area	$1,173	50%
Overseas forces	$338	50%

Final calculation

Multiple locations

Check Table 3 if:

• your usual place of residence was in more than one zone or special area, or
• you serve in specified overseas localities, and
• you were in one of them for 183 days or more.

If the fixed amount for that zone is higher than for the other zones where you were, use that fixed amount and Worksheet 5 to work out your tax offset. This will give you the greatest benefit.

Otherwise go to Category 2.

Category 1

Your usual place of residence was only in one zone or you served only in specified overseas localities for at least 183 days.

Step 1

Complete Worksheet 5.

Worksheet 5 – Zone calculation, one zone or location

Row	Calculation	Amount
a	Your fixed amount from Table 3	$
b	Your base amount from row g Worksheet 4	$
c	Multiply row b by the percentage figure from Table 3.	$
d	Add rows a and c. If you are claiming an overseas forces tax offset, the amount you can claim is row d. Go to step 2. If you are claiming a zone tax offset, read on.	$
e	Any remote area allowance you received	$
f	Take row e away from row d and write the answer at row f.	$

The amount at row f, if it is more than zero (0), is your zone tax offset. Go to step 2.

Step 2

Write your zone or overseas forces tax offset amount at R item T4 on your tax return. Do not show cents. Go to question T5 Invalid and invalid carer 2022.

Category 2

Your usual place of residence was in more than one zone, or you:

• served in a specified overseas locality for less than 183 days, or
• served in a specified overseas locality and you served in one or more zones for a total of at least 183 days.

You claim for the number of days in each eligible place divided by 183, to a maximum of 183 days for a year. Start with your zone that has the highest fixed amount in Table 3. This will give you the greatest benefit.

 

 

 

Step 1

Use Worksheet 6 to work out your claim for each zone, special area or overseas locality you were in (as in the examples).

Worksheet 6 – Zone calculation, more than one zone or location

Row	Calculation	Amount
a	Your fixed amount from Table 3	$
b	Your base amount from row g Worksheet 4	$
c	Multiply row b by the percentage figure from Table 3.	$
d	Add row a and row c.	$
e	Number of days your usual place of residence was in a zone or special area or you served in an overseas locality, to a maximum of 183 days (see the examples)	days
f	Multiply row d by row e.	$
g	Divide row f by 183. This is the amount you can claim.	$

Step 2

Once you have worked out the amount you can claim for each place, add up all the amounts and then use Worksheet 7 to work out your total tax offset.

Worksheet 7 – Total tax offset calculation

Row	Calculation	Amount
a	Total of the amounts you have worked out for each zone from row g Worksheet 6 If you are claiming an overseas forces tax offset, the amount you can claim is row a. Go to step 3. If you are claiming a zone tax offset, read on.	$
b	Any remote area allowance you received	$
c	Take row b away from row a. This is the amount you can claim.	$

The amount at row c, if it is more than zero (0), is the total of your zone tax offset. Go to step 3.

Step 3

Write your zone or overseas forces total tax offset amount at R item T4. Do not show cents. Go to question T5 Invalid and invalid carer 2022.

Where to go next

• Go to question T5 Invalid and invalid carer 2022.
• Return to main menu Individual tax return instructions 2022.
• Go back to question T3 Superannuation contributions on behalf of your spouse 2022.

Provides information to help you determine your entitlement to a zone or overseas forces tax offset.