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Re: Can we record my spouses children as dependents?

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Newbie

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My husband has 2 children from a previous marriage but we have not children together.  He and his ex-spouse have shared care and shared responsibility.   My husband pays his  child support and as a couple we both pay for their private health insurance, clothing, food etc when they are with us.

 

Our accountant says that my husband cannot put down on his tax return that he has 2 dependants because we are not eligable for any form a family tax benefit.    Is that correct?

 

Also, as I contribute to their care when they are with us, can I record them as dependants in my tax return as well?   

 

This area about recording my step children as dependants  I am a bit grey on but surely my husband should at least be able to record his own biological children as dependants within his tax return and the ATO make the relevant determinations from there?

 

Thank you in advance.

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ATO Certified

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Hi @gf23,

 

Welcome to our Community!

 

As @macfanboy has mentioned, unless your husband meets the criteria for a Medicare Levy Reduction there's no reason for your accountant to include them as dependents at M1.


The rules are slightly different when it comes to the Medicare Levy Surcharge. However, if you don't meet the criteria for the MLS (i.e. you, your husband and the rest of your immediate family have appropriate private health insurance cover, or your family income is below the threshold there's no need to declare the children as dependents on the return.

 

You may need to speak to your husband's former partner to confirm everyone is covered by private health insurance for MLS and private health insurance rebate purposes. 

 

Child support costs are not assessable or deductible costs for income tax purposes and should not go on your return. 


Family Tax Benefit payments are administered by the Department of Human Services. You'll need to contact them to discuss your eligibility for these payments.

 

Thanks, JodieH. 

 

 

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Devotee

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For a medicare levy reduction you can only count them If you were single or separated on 30 June 2018, count only the number of dependent children for whom you received the family tax benefit (FTB) during all or part of 2017–18.

 

 In 2017–18 your Medicare levy is reduced if your family taxable income is equal to or less than $46,361 ($60,481 if you are entitled to the seniors and pensioners tax offset) plus $4,257 for each dependent child you have.

 

So if your joint income exceeds $54,875 ($46,361+ $4,257 x2)  there wouldn't be any benefit anyway.

Question is why why is he not receiving any family tax benefit for them.

 

You also can not claim them at M1 (medicare levy reduction)

 

He should definately claim them at M2 (medicare levy surcharge)

Again probably will not make any difference.

 

 

 

 

Newbie

Replies 1

We never received FTB because we are just under the amount of shared care to be eligible and we both work.  But regardless of if it does anything or not I am not sure why the accountant won't record them as dependants as technically they are.   I would have assumed it would be ok to do so for my husband and the ATO does the rest.

 

Not sure about me as they are step-children from my perspective even though I contribute to their care when they are with us.

Devotee

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Like I said for Medicare Levy reduction they wouldn't count (M1 = 0)

 

Plus if you both work and earn over the amount I specified, you wouldn't get any reduction regardless if they are indeed dependants.

 

Not sure exactly what you beleive will happen if you record them as dependants at M1?

 

The only benefit is a marginal reduction in the amount of Medicare levy assuming your joint income was below the previously stated level.

 

 

 

Best answer

ATO Certified

Community Support

Replies 0

Hi @gf23,

 

Welcome to our Community!

 

As @macfanboy has mentioned, unless your husband meets the criteria for a Medicare Levy Reduction there's no reason for your accountant to include them as dependents at M1.


The rules are slightly different when it comes to the Medicare Levy Surcharge. However, if you don't meet the criteria for the MLS (i.e. you, your husband and the rest of your immediate family have appropriate private health insurance cover, or your family income is below the threshold there's no need to declare the children as dependents on the return.

 

You may need to speak to your husband's former partner to confirm everyone is covered by private health insurance for MLS and private health insurance rebate purposes. 

 

Child support costs are not assessable or deductible costs for income tax purposes and should not go on your return. 


Family Tax Benefit payments are administered by the Department of Human Services. You'll need to contact them to discuss your eligibility for these payments.

 

Thanks, JodieH. 

 

 

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