myTax 2019 Credit for interest on tax paid

You can claim for interest on some early payments made to the ATO more than 14 days before the due date during 2018–19 income year.

Essentials

Early Payments:

If, during 2018–19, you made any of the following payments to us more than 14 days before the due date, you can claim interest on early payments:

• income tax (including Medicare levy and Medicare levy surcharge) shown on your notice of assessment
• compulsory Higher Education Loan Program (HELP) repayment amount shown on your notice of assessment
• compulsory Student Financial Supplement Scheme (SFSS) debt repayment shown on your notice of assessment
• compulsory Trade Support Loan (TSL) debt repayment shown on your notice of assessment
• compulsory Student Start-up Loan (SSL) repayment shown on your notice of assessment
• compulsory ABSTUDY Student Start-up Loan (ABSTUDY SSL) repayment shown on your notice of assessment
• interest on distributions from non-resident trust estates
• shortfall interest charge
• income tax penalty for the 1999–2000 and earlier income years
• general interest charge for lodging a late income tax return for income years up to and including 1999–2000
• general interest charge on an increase in the tax payable resulting from an amended assessment for income years up to and including 1999–2000.

If you have already requested the direct payment of interest on your early payment, do not claim it in your tax return.

The following are not early payments:

• pay as you go (PAYG) withholding amounts including
  • amounts withheld from interest, dividends and royalties
  • amounts withheld by payers, including those withheld for HELP, SFSS or TSL, SSL or ABSTUDY SSL.
• PAYG instalments.

For further information, see:

• Interest on early payments and overpayments of tax
• Practice Statement Law Administration PS LA 2011/23 Credit interest which discusses the policy and details when interest is payable.

If you received interest from us, you must show it as income on your tax return for the year in which we paid or credited that interest to you.

The period for which you can claim interest starts on the later of:

• the date you made your payment
• the date of issue of our notice informing you of the amount of tax, debt, interest or instalment.

That period ends on the earlier of:

• the due date for payment
• the date when we refunded your early payment, if we refunded it.

For example, a notice of assessment issued to you on 19 September 2018 showed an amount of tax payable. If the amount was due on 21 November 2018 but you paid early, on 1 November 2018, the interest period would be 21 days: 1 November to 21 November.

Completing this section

You will need:

• notification from the ATO showing the date of the notice, the amount owing and the due date
• details of your date of payment, shown on your bank statement or receipt from the post office or the ATO. Allow three extra days if you posted your payment.
• Calculate your interest amount.
  To calculate your interest amount you can use our calculatorThis link opens in a new window or worksheet.

1. Enter your interest amount.
2. Select Save and continue.

Worksheet

If the early payment extends over two or more interest periods, you will need to do steps 1 to 4 for the number of days in each period.

1. Work out the number of days your payment was early by. This is the number of days from the later of:
   • the date you paid the amount, or
   • the issue date on your notice informing you of the amount of tax, debt, interest or instalment
     up to and including the date when the payment was due (or the date when we refunded your early payment).
2. Divide the number of days from step 1 by 365.
3. Multiply the answer you got at step 2 by the amount of the payment.
4. Multiply the answer from step 3 by the rate of interest for the period and divide by 100. For example, for the period 1 July 2018 to 30 September 2018, multiply by 1.96 and divide by 100.
   The interest rate that applies to each quarter of 2018–19 appears below.

Interest rates for early payments calculation

Period	Interest rate (% pa)
1 July 2018 to 30 September 2018	1.96
1 October 2018 to 31 December 2018	1.96
1 January 2019 to 31 March 2019	1.94
1 April 2019 to 30 June 2019	1.96

5. Add up the amounts you worked out for each period at step 4.
6. If the amount from step 5 is equal to or greater than 50 cents, enter the total at Credit for interest on early payments - amount of interest. Show cents. If the amount is less than 50 cents, you cannot claim.

These myTax 2019 instructions are about credit for interest on tax paid.