Are Jobkeeper Repayments Tax Deductible?

The end of the month will see the end of the Jobkeeper payment scheme from the government.

Eligible businesses who choose to voluntarily repay an amount from the Jobkeeper pay that they were given may be able to claim a tax deduction if they treated the payment correctly as assessable income.

A voluntary repayment of Jobkeeper may be deductible only in limited circumstances, and only if the voluntary payment is clearly appropriate to achieve or directed towards achieving the business objectives of the business. The circumstances for deduction are if the payment is made to:

• prevent reduction in business, or
• publicise and promote your business in the short term.

Businesses must claim the voluntary repayment deduction in accordance with ATO guidelines and must contact the ATO prior to making a voluntary payment.

Voluntary repayments:

• are treated differently to other payment types made to the ATO
• cannot be made through usual ATO payment channels
• require a special Payment Reference Number (PRN).