The $250 non-deductible threshold for self-education expenses could soon be a thing of the past.
The threshold was first introduced in 1975 alongside a concessional Tax rebate of $250. It was designed to prevent individuals from claiming both the Tax rebate and a Tax deduction for the same expenses.
However, in 1985 the concessional Tax rebate was removed but the non-deductible threshold remained. This meant that the threshold no longer achieved its intended purpose.
The topic was neglected until December 2020 when The Treasury issued a discussion paper dealing with education and training expense deductions for individuals. The paper discussed the outdated $250 non-deductible threshold for self-education expenses and questioned if this should be removed.
Following this discussion, the Treasury Laws Amendment (2022 Measures No. 2) Bill 2022 was introduced to the House of Representatives on 3 August 2022. Schedule 3 to the Bill looks to remove the $250 non-deductible threshold for work-related self-education expenses in s82A of ITAA 1936 from the 2022-23 income year.
Once legislated, individuals can continue to deduct self-education expenses if the expenses meet one of the following conditions:
- Maintains or improves the specific skills or knowledge you require in your current work activities
- Result in, or likely to result in, an increase in income from your current work activities
