Hi @jcroc,
When arrears payments from DVA are assessable income, they’re are taxed in the year you receive them, not the years they relate to. You can’t amend tax returns going back to 2008–2022 to spread the income.
Depending on the type of payment, you may be eligible for a lump sum arrears tax offset to reduce the extra tax from having the income taxed in one year. If applicable, this offset is calculated after lodgment and shows on your notice of assessment. To support this, you’d need to provide a breakdown of the years and amounts the arrears relate to when lodging.
Not all DVA payments are taxable, and not all arrears qualify for the offset. The correct treatment depends on the nature of the payment, not just the period it relates to.
The system will work out if you're entitled to a tax offset amount after you provide the breakdown of years and amounts.
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