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How Covid-19 has changed your work-related tax deductions

A woman working from home while her daughter tries to distract her on the left, and protective masks and gloves on the right.
This tax year sure has been different, so what can you claim on your tax return? (Images: Getty)

The Australian Taxation Office has clarified what can and can't be claimed as work expenses in the year of the coronavirus epidemic.

"This tax time the ATO expects to see a substantial increase in people claiming deductions for working from home or for protective items required for work," said ATO assistant commissioner Karen Foat.

Here are four points of advice from the ATO about work-related expenses:

Working from home: what I can claim

Rather than having to work out all the different minute expenses, the tax office has created a temporary "shortcut method" to claim expenses for millions of people forced to work from home.


"People claiming their working from home expenses using the shortcut method, should include the amount at the ‘other work-related expenses’ question in your tax return and include ‘COVID-hourly rate’ as the description," stated the ATO.

The method can be applied for work at home hours between 1 March and 30 June, 2020.

"It covers all deductible expenses and can be used by multiple people working from home in the same house."

However, you must have kept a log of the hours that you worked from home to backup the numbers inputted into the tax return.

"[Shortcut method] is all inclusive, meaning you can’t claim for any other working from home expenses," said Foat.

The shortcut method is optional, so you can still calculate everything individually if you think that would advantage you.

Travelling from home to work is still not claimable

A golden rule each tax year is that costs incurred to commute to and from work is not a deductible expense.

"Generally, most people cannot claim the cost of travelling to and from work and working from home as a result of COVID-19 does not change this," Foat said.

"For example, if you are working from home because of COVID-19 but need to go to your regular office one day per week, your home to work travel is still private travel and cannot be claimed."

Protective clothing: what I can claim

Protective gear used for work is a category that will see a surge in interest this tax year.

“Taxpayers working in jobs that require physical contact or close proximity with customers or clients during COVID-19 measures may be able to claim a deduction for items such as gloves, face masks, sanitiser or anti-bacterial spray if they have paid for the items and not been reimbursed," said Foat.

"This includes industries like healthcare, retail and hospitality."

Reduce claims not relevant outside the coronavirus period

There will be expenses that were not incurred or somewhat reduced during the coronavirus lockdown period, such as laundry or travel costs.

These must be reduced in your tax return for that part of the year, so you don't overclaim.

"It’s still important to meet the three golden rules: you must have spent the money and not have been reimbursed, it must relate directly to earning your income, and you must have a record to prove it," said Foat.

"If you aren’t travelling for work, you can’t claim travel expenses. If you aren’t wearing your work uniform, you can’t claim laundry expenses."

Foat said that taxpayers must adjust for change in work situations due to the epidemic and lockdown.

"We are... asking people to take a bit of extra care if their circumstances have changed this year."

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