I’ve received a lot of questions regarding the new arrangements for claiming the Child Care Tax Rebate.
Previously the CCTR was 30% of out-of-pocket childcare expenses and paid annually. The CCTR now covers 50% of out-of-pocket approved expenses for eligible families. Additionally, you can now be paid quarterly rather than annually.
If you qualitfy for CCTR, out-of-pocket expenses are what you had to pay in total for approved child care fees less any Child Care Benefit you have received. The maximum entitlement is currently $7,500 per child per year.
If you want to receive your Child Care Tax Rebate as a quarterly payment, you must claim Child Care Benefit as reduced fees. The CCTR is based on your Child Care Benefit (CCB) entitlement. If you choose to claim CCB as a lump sum payment, you will not receive your Child Care Tax Rebate entitlement until the end of that year, once your Child Care Benefit entitlement has been determined.
Here is what the Family Assistance Office have to say about payments:
If you choose to receive it quarterly, the first payment will be made by the Family Assistance Office from October 2008 once your service has reported how much out-of-pocket expense you had for July to September 2008. The first three quarters will be paid based on your provisional Child Care Benefit entitlement.
At the end of the financial year, the Child Care Tax Rebate will be reconciled against your actual income and adjusted for the financial year. Payment of the last quarter of the Child Care Tax Rebate will be ‘held’ until Child Care Benefit reconciliation occurs (when your tax returns have been lodged and all your child care attendance information has been received). This will then be used in any adjustments as part of the reconciliation. The Child Care Tax Rebate entitlement is paid directly into your bank account by the Family Assistance Office.
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
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