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Jobkeeper Partnership - can it be shared between partners?

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Initiate

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My boyfriend and I run a business under a partnership ABN that has had to completely cease trading due to covid. We were both accepted for job seeker and have both been receiving payments from Centrelink for a month now.


This week I was accepted and paid Jobkeeper (I am the eligible business participant). So now we will need to report this as income to Centrelink. 
From my understanding, as a partnership, the Jobkeeper payment is actually being paid to the entity (the partnership), and the whole payment does not have to be paid directly to the business participant (me). Basically we usually split any business income (profit) 50/50 on our personal tax returns. So now that our partnership entity receives $3000 a month from the ATO as jobkeeper, we would divide this evenly between us as individual income on our tax returns like we do normally with other business income.


However, I rang the ATO this morning to confirm this and the person on the phone advised me that as the eligible business participant, the ATO expects the total jobkeeper payment on my personal tax return (and none of it on my partners - eg: we can't share our 1 Jobkeeper payment 50/50 on our personal tax returns). If I choose to give some of that money to a business partner that is up to me, but it is my personal income come tax time. She even went to use the example that at tax time, if our partnership income from regular trading is $20,000 and we split that 50/50 as $10,000 each for personal tax returns, I would then have to add the jobkeeper payment to my $10,000 share on my personal return and my partner would just declare his $10,000 of our business profits (with no jobkeeper added to his). This advice appears to go against the idea that the money is received by the entity and can be shared among partners on personal tax returns however profits are normally shared.

These are two very contradicting answers which will have very different outcomes for both our tax return and our reporting to centrelink - we could incur debt if we report this incorrectly.
I am looking for written clarification on whether jobkeeper payments can be shared among partners on personal tax returns however income is normally distributed in that partnership (eg: 50/50 split), or can the total amount only go to the eligible business participants individual tax return? 
Thank you.

 

 

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Dynamo

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Hi ClaireandMartin,

 

Unfortunately only 1 eligible business participant is allowed to claim Job Keeper in a partnership. 


On the ATO's website regarding eligible business participants of a Partnership (https://www.ato.gov.au/general/jobkeeper-payment/sole-traders-and-other-entities/#Partnershiptrustor...),the FAQ's lists this question:

"Can more than one eligible business participant be nominated by an entity?

  • No. Only one eligible business participant can be nominated. This means that a business entity must choose which eligible business participant to nominate, and that entity is only entitled to one JobKeeper payment per fortnight."

 

 

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Dynamo

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Hi ClaireandMartin,

 

Unfortunately only 1 eligible business participant is allowed to claim Job Keeper in a partnership. 


On the ATO's website regarding eligible business participants of a Partnership (https://www.ato.gov.au/general/jobkeeper-payment/sole-traders-and-other-entities/#Partnershiptrustor...),the FAQ's lists this question:

"Can more than one eligible business participant be nominated by an entity?

  • No. Only one eligible business participant can be nominated. This means that a business entity must choose which eligible business participant to nominate, and that entity is only entitled to one JobKeeper payment per fortnight."

 

 

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Hi Josh,
I understand very clearly that a partnership can only have 1 eligible business participant. I think maybe you didn't quite understand my question. Let me try and be a bit clearer in what I am asking Smiley Happy

As a partnership, we can only have 1 eligible business participant. On the ATO website, it states that the entity (eg: the partnership) receives the JobKeeper payment, not the eligible business participant. (https://www.ato.gov.au/general/jobkeeper-payment/sole-traders-and-other-entities/)

We normally split our partnership business income 50/50, does that mean we can split that 1 Jobkeeper payment that our entity receives, as 50/50 income between us on our individual tax returns?
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Dynamo

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Hi ClaireandMartin,

Thanks for the clarification, I now understand your predicament much more clearly.

I have trawled through various government sources of information however the only clarification offered by them is indeed the wording that the “payment is received by the entity.” As you suggest, this is an open ended interpretation and you could argue that it can be distributed evenly between partners. Alternatively you could argue that in the case of a company, the entity also receives the JobKeeper payments - however it is obliged to pass on this payments in full to its employees.

I found this article which appears to provide some clarification https://www.google.com/amp/s/www.accountantsdaily.com.au/tax-compliance/14253-ato-issues-further-gui...
It suggests that the key difference in the two scenarios I’ve mentioned above is that for eligible business participants there is no obligation mentioned whereby the entity must pass the payment on to the participant, but rather it’s up to the entity to do with it as they please - in your case distribute it evenly!

Hope this helps you out despite not being sourced from an official Government body.