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Excess super contributions: once-only refund offer

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Excess superannuation contributions continue to perplex and annoy taxpayers. From the 2011–2012 year, there is a once-only opportunity to have excess concessional contributions refunded.

The ATO says it may offer some taxpayers to have their excess concessional contributions refunded. The offer will only be made once. If they decide to accept this offer, they will pay marginal tax rates on the amount above the cap, instead of paying excess contributions tax.

A taxpayer’s choice as to whether to accept the one time only offer, or not, is a final decision and cannot be revoked. Once a taxpayer has received an offer, regardless of whether or not they accept it, they will not be eligible for an offer in future years.

Taxpayers may receive this offer from the ATO if they:

  • exceeded their concessional (before-tax) contributions cap for the first time;

  • exceeded that cap by $10,000 or less; and

  • have lodged an income tax return within 12 months of the year they have excess contributions.

The ATO says most offers for 2011–2012 will issue from October 2012, although some might have been made earlier. The offers will be sent directly to the taxpayer’s postal address.

The ATO form Choice to include excess concessional contributions in assessable income that is sent to taxpayers with the refund offer needs to be completed. Election to accept the offer must be returned to the ATO within 28 days of the issue date of the offer.

Source: The TAXAGENT magazine, Issue 56, September 2012, www.ato.gov.au/taxprofessionals/content.aspx?menuid=0&doc=/content/00333018.htm&page=52&H52

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