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Claiming the small business income tax offset

Posted on 30 August '17 by , under Tax.

The small business income tax offset can help reduce the tax small businesses pay on business income by up to $1,000.

This offset is available from the 2015-16 income year onwards. Small businesses with an aggregated turnover less than $5 million can access the concession from the 2016-17 income year.

Business income derived by another partnership or trust, in which the small business owner is not a partner or beneficiary, is not eligible for the offset.

Small business owners can claim the offset if they receive a share of net small business income from a small business:

  • partnership, in which they are a partner
  • trust, in which they are a beneficiary.

The offset is 8 per cent for the 2016-17 income year onwards, 5 per cent for the 2015-16 income year. The offset will increase to 10 per cent in 2024-25, 13 per cent in 2025-26 and 16 per cent in 2026-27.