# ATO: Deductibility of COVID-19 test expenses



## Jack Malarkey (Jan 11, 2016)

Australian Taxation Office:









COVID-19 test expenses


From 1 July 2021, if you pay for COVID-19 tests such as a rapid antigen test (RAT) or a polymerase chain reaction (PCR) test for a work-related purpose, you can claim a deduction for its cost.




www.ato.gov.au





*COVID-19 test expenses*

From 1 July 2021, if you're an employee, sole-trader or contractor and you have paid for a COVID-19 test for work-related purposes, you can claim a deduction.

On this page

When you can claim COVID-19 testing
When you can't claim COVID-19 testing
Keeping records for COVID-19 tests
Completing your tax return

*When you can claim COVID-19 testing*

From 1 July 2021, to claim a deduction for the cost you incur to pay for a COVID-19 test, you must:

use the test for a work-related purpose, such as to determine if you can attend or remain at work
get a qualifying COVID-19 test, such as a
polymerase chain reaction (PCR) test through a private clinic
other tests in the Australian Register of Therapeutic Goods, including rapid antigen test (RAT) kits

pay for the test yourself (that is, your employer doesn't give you a test or reimburse you for the cost)
keep a record to prove that you incurred the cost (usually a receipt) and were required to take the test for work purposes.
You can only claim the work-related portion of your expense on COVID-19 tests. For example, if you buy a multipack of COVID-19 tests and use some for private purposes (such as by other family members or for leisure activities), you must only claim for the portion of the expense you use for a work-related purpose.

*When you can't claim COVID-19 testing*

You can't claim the cost of a COVID-19 test where any of the following apply:

you use the test for private purposes – for example, to test your children before they return to school or day care
you receive a reimbursement for the expense from your employer or another person
you work from home and don't intend to attend your workplace.
You also can’t claim a deduction for the travel or parking expenses you incur to get your COVID-19 test because these expenses don't have a sufficient connection to you using a COVID-19 test.

Example: COVID-19 tests you can claim

Mary is a casual employee at a local café. In April 2022 Mary buys a qualifying multipack of COVID-19 tests, which she only uses before commencing a shift if she has any COVID-19 symptoms or has been in contact with a COVID19 case. Her employer doesn't reimburse her for the cost of the COVID-19 tests.

Mary can claim a deduction for the cost of these COVID-19 tests.

End of example

Example: personal and work-related use and deductibility

Vinh buys a qualifying 2 pack of COVID-19 tests at the local pharmacy. Vinh uses one test to confirm he doesn't have COVID-19 before attending a local sporting event. A week later he realises that he has been exposed to COVID-19 and uses the other test to check his COVID-19 status before attending his place of work.

As Vinh used one test for personal use and one test for work purposes, he can only claim a deduction for half the cost of the COVID-19 tests.

End of example

*Keeping records for COVID-19 tests*

You need to keep records of COVID-19 tests to demonstrate that you paid for the test and the test was required for work related purposes. This may include a receipt or invoice, and correspondence from your employer stipulating the requirement to test.

If you don't have a record of your expenses before the law changed on 31 March 2022, we will accept reasonable evidence of your expenses.

Reasonable evidence is documents that show the cost of the test and requirement to take it for work purposes. This may include:

bank and credit card statements
a diary or other documents, including receipts, that shows a pattern of buying COVID-19 tests after the law change that could reasonably have applied from 1 July 2021.
*Completing your tax return*

Once you calculate your deduction, enter the amount at Other work-related expenses in your tax return.


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## Jack Malarkey (Jan 11, 2016)

Despite the Australian Taxation Office advice in the final paragraph of the post immediately above, a sole trader wouldn’t claim this expense against the label for ‘other work-related expenses’ (a label for use by employees) but would subtract the expense from gross business income when calculating net business income.


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## Jack Malarkey (Jan 11, 2016)

See also:









ATO needs to clarify COVID test deductions, says NTAA


New rules leave uncertainty over how it will apply to taxpayers.




www.accountantsdaily.com.au













ATO hints at ‘common sense’ approach to COVID test deductions


Expenses incurred from the test before the individual engages in work will most likely be covered, says CPA Australia.




www.accountantsdaily.com.au


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