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TripFX21(Newbie)Newbie
14 Dec 2023

I was hoping to get some clarification regarding Income Averaging (IA) Eligibility and Tax Return Amendments.


  1. Do you have to specifically be an Australian Permanent Resident or Citizen to be eligible, or simply a Resident for Tax Purposes (as with a working Visa)?
    1. Specifically, if one was a Resident for Tax Purposes working on an approved Visa, and later became a Citizen, does this impact eligibility?
  2. Does being paid through either an ABN or PAYG have any bearing on eligibility?
    1. Specifically in the field of Digital Art for Film and TV (functionally the same job as a Film Editor (listed under Production Associate)).
  3. If one discovers they have been eligible for IA and have not been claiming it, should they ask to Amend their previous Tax Returns so the Special Professional Income component of their Total Income can be averaged?
    1. If so, how far back should one go?
  4. If any of these answers were different in previous years, could you please clarify when they changed and what the previous answers were?


Thank you in advance for any insights.

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306 views
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Most helpful reply

CaroATO(Community Support)Community Support
17 Dec 2023

Hi @TripFX21,


To be eligible to use income averaging you'll need to be an Australian resident for tax purposes at any time during the financial year. Keep in mind, this is different


When we look at the eligibility criteria it doesn't talk about how you are paid as a contractor or employee, so it has no effect.


You're right in thinking about amending your tax returns. You've two years from the date after your notice of assessment was issued for a particular year to lodge an amendment. After this time, you can explore your options for lodging an objection.


The rules around income averaging have been consistent for quite some time.

All replies

Most helpful reply

CaroATO(Community Support)Community Support
17 Dec 2023

Hi @TripFX21,


To be eligible to use income averaging you'll need to be an Australian resident for tax purposes at any time during the financial year. Keep in mind, this is different


When we look at the eligibility criteria it doesn't talk about how you are paid as a contractor or employee, so it has no effect.


You're right in thinking about amending your tax returns. You've two years from the date after your notice of assessment was issued for a particular year to lodge an amendment. After this time, you can explore your options for lodging an objection.


The rules around income averaging have been consistent for quite some time.

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Incoming Averaging Eligibility Clarification | ATO Community