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COVID tests are tax deductible

COVID tests are tax deductible – here’s how to claim your deduction

The government has announced that COVID-19 tests are tax deductible. So, what does this really mean and how do you claim your tax deduction?

Key points:

  • PCR tests and Rapid Antigen Tests (RATS) are tax deductible.
  • The deduction comes into effect 1 July 2021.
  • The deduction is available for Individuals and businesses.
  • They must be purchased for work-related purposes.
  • The average Australian who is taxed 32.5% will receive a refund of $6.50 on very $20 two pack of RATS.

What tests are covered?

Only tests that are purchased for work-related purposes are tax deductible. This means that any test you have purchased and used to enable you to work or enter a work-site are tax deductible. If you have purchased any to use on other family or household members such as your children, these are not tax deductible.

The new legislation covers both RATs and PCR tests, however also included future medically approved tests. PCR tests are presently provided by the government free of charge.

Can I claim the tests I’ve already purchased?

The legislation is back dated to 1 July 2021. This means any test you have purchased on or since 1 July 2022 is tax deductible if it used for work-related purposes.

If you purchased the test prior to 1 July 2021, but took the test on or after 1 July, unfortunately this is not tax deductible.

How do I claim the tax deduction?

As with all tax deductions, you will need to retain your receipt or other proof of purchase to claim the tax deduction.

If you have lost the receipts for tests already purchased, you can still claim the tax deduction, as long as you have some proof of purchase. A credit card statement would work as a record of the purchase in this case.

The ATO would also accept a written diary entry if you weren’t able to produce a credit card statement. This would be suitable in the case of paying for the tests in cash. The diary entry should record four points. What you purchased, where you purchased the test, what time you purchased it and the amount the test cost.

The tax deduction should be entered in on your online tax return. You can complete this for the 2022 financial year after 1 July, 2022.

How do I get my money back?

As with all tax deductions you can enter them into your online tax return. The first tax return that will include this deduction will be the current financial year – Financial Year 2022. Online tax returns will be available to completed from 1 July 2022. You can log in and complete via

Your refund is usually paid within 14 days of lodging your tax return. Usually quicker than this in the case of an online tax return.

The refund for your COVID tests will depend on your tax rate. The average Australian is taxed at 32.5% and would receive an increase to their refund of $6.50 for every $20 two-pack of RATs.

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