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Know About Claiming Loss Carry Back For Early Balancers

Are you an early balancer looking to claim your loss carry back? It is a form of refundable tax offset that eligible entities can get by choosing a carry back losses when there were income tax liabilities. Corporate entities can claim this:

  • after the end of their 2020–21 and 2021–22 income years
  • in their 2020–21 and 2021–22 company tax returns

If you are an early balancer SAP and want to claim the loss carry back tax offset in your company tax return for the 2021–22 income year before 1st July 2022, complete the additional labels required by the ATO and follow the mentioned steps to make a loss carry back claim.

Criteria To Make A Loss Carry Back Claim

No matter, which corporate entity or business you own, eligible ones with an early balancer SAP can claim the loss carry back tax offset for the 2021–22 income year before 1st July 2022.

To do so, you can use any of the below ways:

  • Standard Business Reporting enabled software having additional loss carry back labels required by the ATO.
  • Attach a paper copy of the company tax return 2021 and schedule of information to report the aggregated turnover and loss carry back labels required by the ATO.

Not only this, but entities can also consider using the loss carry back tax offset tool based on the information you gave and provide a report regarding the labels needed to claim the loss carry back tax offset.

Overview Of Instructions For Completing The Labels

If you have decided to lodge before 1st July 2022, there are three sets of instructions that will help you complete the loss carry back and aggregated turnover labels for the 2021–22 income year.

  • Schedule of additional information

For those preferring a paper copy of the company tax return 2021 to claim the loss carry back tax offset, you are required to provide information for additional and aggregated turnover labels not in the company tax return 2021. For this, you need to:

  • record the information and its corresponding label on a separate sheet of paper
  • attach the paper to the Company tax return 2021.

Other instructions include:

  • Tax loss from the 2020–21 income year
  • Tax loss from the 2021–22 income year
  • Aggregated turnover labels – item 8
  • X – Select your aggregated turnover range
  • Y – Aggregated turnover
  • Loss carry back labels – item 13

Claiming loss carry back refundable tax offset is quite complex for businesses having little to no knowledge of tax planning and preparation. If you are eligible for getting a loss carry back before 1st July 2022, talk to our tax accountants at KPG Taxation for assistance. We’ll be more than happy to help you.