How to handle an overpayment made in a Lump Sum E?

Question

PayrollDeanne · Accepted Answer

To simplify things, here's my summary: - You were paid $20,000 in 2022/2023 - The payment was Lump Sum E for 2021/2022 - In 2023/2024, it was discovered that $2,000 of that was overpaid, which you repaid This is a 'prior FY overpayment', which means: - Your 2022/2023 income is overstated by $2,000 - Your Lump Sum E for 2021/2022 is therefore $18,000 They should have issued you with an amended Payment Summary (this has always been the ATO requirement) to reduce the payment to $18,000, and they should have sent off an amended PSAR to the ATO (electronic file of your PS). You may be able to claim the lump sum payment in arrears tax offset (https://www.ato.gov.au/individuals/income-deductions-offsets-and-records/tax-offsets/lump-sum-payment-in-arrears-tax-offsets/) for 2021/2022 of $18,000 if that amount is 10% or more of your income for that FY. Deanne

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