Covid-19 Tests - Claiming a Tax Deduction

The March 2022 budget confirmed that the costs of taking a COVID-19 test to attend a place of work are tax deductible for individuals from 1 July 2021.

In making these costs tax deductible, the Government will also ensure FBT will not be incurred by businesses where COVID-19 tests are provided to employees for this purpose.

While specific guidance for Family Day Care as well as other small non-employing business is not provided from the Australian Taxation Office (ATO), it would be expected that if you are required by your scheme to undertake any Covid 19 tests in order to continue your business, it would have sufficient connection to your income earning activities and be deductible.

While awaiting final confirmation and clarification of this matter from the ATO, we recommend that you keep all of your receipts ready for tax time to make a claim where possible.