EDUCATION TAX REFUND

The Education Tax Refund (ETR) is a new Government initiative to help with the cost of educating primary and secondary school children. It means that eligible parents, carers, legal guardians and independent students could receive 50% back on certain educational expenses. These items include computers, educational software, textbooks, and stationery.

If you receive family Tax Benefit (FTB) Part A you most likely will be eligible. However, there are some payments that prevent you from receiving FTB Part A, but which will still entitle you to receive the refund. You will be able to claim this refund as from the 1st July, 2009 for the 2008-09 financial year. This means you can claim for items purchased from 1st July 2008 onwards. You must remember to keep your receipts. These not only substantiate the purchase, but also will assist calculate the entitlement.

Who is Eligible?

You can claim the ETR if during the financial year you had a child that meets the schooling requirements and

• you receive FTB Part A, or
• a payment was made to you from Family Assistance / Centrelink   that prevented you from receiving FTB Part A (such as Youth allowance, Disability Support Pension, ABSTUDY Living Allowance, the Veterans' Children Education Scheme)   or
• your child stopped full-time school during the year and received income over the cut out amount which prevented you from receiving FTB Part A for the child,
• If you are an independent student you received a social security pension or benefit, a labour market program payment, or a prescribed payment above, and were an independent person for the purpose of this payment, were under the age of 25 years of age, met the schooling requirements, were an Australian resident and lives in Australia.

What are the schooling requirements?

For the purpose of the ETR, in order to meet the schooling requirements, a child or student must be:

• registered or enrolled in a primary or secondary school course provided at an educational instution such as a primary school, secondary school, or a TAFE college (secondary school students only), or
• registered or enrolled with the educational authority in their state or territory as a home schooled student, or
• registered or enrolled in a course of study or instruction which the Minister administering the "Student Assistance Act 1973" determines that the ETR applies for.

They must also have attended the course of study or instruction, or receive home schooling for at least one (1) day in a six month period, commencing carers July, or carers January. Even if the child or independent student only meets the schooling requirement for part of the year you can still claim for that period.

What is an eligible education expense?

An eligible education expense is:

• incurred by an eligible person
• relates to a child or independent student's education
• an item that is specified in the legislation as an eligible education expense, and
• incurred on a   day when the child or independent student satisfied the schooling requirements (above)

You cannot claim the ETR for an expense if:

• it is an allowable tax deduction or subject to another tax offset, or
• you receive or are entitled to receive payment or property as reimbursement or payment for the expense under a Commonwealth Government legislative prescribed benefits, grant or subsidy.

*****What items can I claim?

Eligible expenses include the cost of buying, establishing, repairing and maintaining any of the following items:

• laptop computers and home computers, re[airs & associated costs
  
• computer related equipment such as printers, USB flash drives, as well as disability aids to assist in the use of computer equipment for students with special needs
• computer repairs
• home internet connections
• computer software for educational use
• school textbooks and other printed material, including prescribed textbooks, associated learning materials, study guides, and stationery, and
• prescribed trade tools for secondary school trade courses.

*****What items can't I claim?

The type of items you can't claim include:

• school fees
• school uniform expenses(keep receipts from 1 July - as this will change in 2012)
  
• student attendance at school based extra curricular activities such as excursions and camps
• tutoring costs
• sporting equipment
• musical instruments
• school subject levies - such as payment for consumables for particular subjects such as woodwork, art or home sciences
• building levies or donations
• library book fees
• school photos
• tuck shop expenses
• waiting list fees
• transport
• membership fees, and
• computer games and consoles
• You cannot claim the expense if that item is otherwise a tax deduction or subject to another tax offset.
  

How much can be claimed?

The ETR can be claimed each financial year for each child who meets the schooling requirements. The ETR entitles you to claim 50% of the eligible education expenses (above) up to the maximum claimable amounts. These thresholds have increased  for the 2010-11 year and are:

• $794 for each primary school child - that is a maximum refund of $397 for each primary school child you have ($794 x 50%), and
• $1588 for each   secondary school child - that is a maximum refund of $794 for each secondary school child you have ($1588 x 50%)

If you spend over the maximum claimable amount in one financial year, you can claim the excess eligible education expense in the following year, that is it can be rolled over. Eligible expenses that are not claimed within two (2) financial years are lost and cannot be claimed in later years.

Similarly, where an eligible expense has been incurred for more than one eligible child, (such as a purchase of a $3000 computer) the expense can be shared between he children, subject to the children having access to the purchased item and all the above criteria are recognised. This is called pooling. The eligible expense will be shared 50/50 between each child and claimed as an eligible expense.

How do I claim?

Only the recipient of   FBT Part A, is allowed to be the person who makes the ETR claim. The recipient's spouse is not entitled to make this claim. You must make this claim in your financial year income tax return, and enter the related details in item T6.

If you are not required to lodge an income tax return, you can claim by lodging a Education Tax Refund Claim 2011 with the ATO.