Item M2 - Medicare levy surcharge

This is a mandatory item and if it is not completed, or is completed incorrectly, the ATO may charge the full Medicare levy surcharge, where the taxpayer exceeds the surcharge threshold.

Click this link for full details on completing Item M2 Medicare levy surcharge on the ATO website.

For the whole period 1 July 2017 to 30 June 2018 were you and all your dependants (including your spouse) covered by private patient HOSPITAL cover? 

If the answer to the above question is Yes, Tax will default the total number of days in the relevant year (365 or 366 in a leap year) at label E.

Use the worksheet Medicare Levy Surcharge (mls) to record the details required to correctly calculate any Medicare levy surcharge liability based on the taxpayer's income or the adjusted Family Income where the taxpayer has a spouse, married or de facto. This is a particularly helpful schedule where the taxpayer has more than one Health Fund policy or has mixed circumstances. Refer to Medicare Levy Surcharge (mls).

For MYOB Tax to calculate the MLS Lump Sum Payment in Arrears (LSPIA) offset the following fields must be completed:

• Item 20 - in the “For calculation of estimate only” box

• Item 24 - by selecting Code A from the list at Category 1 income, and

• Spouse Details worksheet.

If the taxpayer had a spouse at June 30 of the current income year, then spouse details must be completed at item SD so that the validation is successful.

V2691 - Agents need to ensure that spouse details and number of dependent children are included in the income tax return when completing the private health insurance policy details section for Tax claim code C or D. If you choose Tax Claim Code options C or D, and the client has no children, you must enter 0 at M2 label D Number of dependent children. Refer to Item (H) - Private health insurance policy details.

CCH References

2-335 Medicare levy surcharge