Net medical Expenses Offset
Not available in Accountants Office
T5 Label X shows the Net medical expenses on which the offset is claimed. See Item T5 - Total net medical expenses for disability aids, attendant care or aged care.
MYOB Tax calculates NMETO based on the taxpayer’s adjusted taxable income for Medicare Levy Surcharge purposes with the offset being limited to:
20% of net medical expenses for Income below the current year threshold, and
10% of net medical expenses for income above the current year threshold.
Gross medical expenses: This is the sum of all medical expenses before any refund received and comprises both Disability aids and aged care costs as well as other medical expenses not related to disability.
Refunds: This is the amount the taxpayer received as a refund from either Medicare or the Health fund. This amount is deducted from the Gross medical expenses to arrive at the Net medical expenses amount on which the NMETO is calculated.
Offset: This is the offset calculated on the net medical expenses.
Click this link to Net Medical Expenses tax offset calculator on the ATO website.
You can only claim this offset if you had net medical expenses that relate to disability aids, attendant care or aged care.
Disability aids are items of property manufactured as, or generally recognised to be, an aid to the functional capacity of a person with a disability but, generally, will not include ordinary household or commercial appliances.
Attendant care expenses relate to services and care provided to a person with certain disabilities to assist with everyday living, such as the provision of personal assistance, home nursing, home maintenance, and domestic services to a person who is blind or permanently confined to bed or a wheelchair.
Both the ATO and MYOB will calculate any offset entitlement based on the Total net medical expenses calculated according to the adjusted taxable income of the taxpayer. The offset, if any, will be included in the F4 estimate.
Taxpayers are affected by this change if they have an adjusted taxable income (ATI) above the Medicare Levy Surcharge thresholds.
Below the relevant threshold, they are not affected by this change and can claim an offset of 20% of their net medical expenses over $2,333.
Above the relevant threshold, they are only eligible for a claim of 10% of their net medical expenses over $5,504.
Refunds
Enter any refunds for the expenses received from Medicare or a private health insurer.