Franking credits attached to Australian company dividends are claimed in your income tax return as a tax offset. The process involves including the grossed-up dividend in your assessable income and then claiming the attached franking credit against your tax payable. This guide walks through how to find your franking credit amounts, how to enter them in myTax, and how refundable credits work.
Step 1 — Find Your Franking Credit Amounts
Your franking credits are reported to you by the company or fund that paid the dividend:
| Source | Where to find credits |
|---|---|
| ASX-listed shares | Annual dividend statement from the company or share registry |
| ETFs and managed funds | AMMA statement (annual tax statement from fund manager) |
| Listed investment companies (LICs) | Annual distribution statement |
| myTax pre-fill | ATO pre-fills many dividends reported by companies — check for accuracy |
The annual dividend statement will show:
- Cash dividend amount — the dollar amount you received in your account
- Franking credit amount — the imputation credit attached
- Grossed-up dividend — the total to include in your return (cash + franking credit)
Step 2 — Check myTax Pre-Fill
The ATO receives dividend information directly from companies and share registries through their data matching program. When you open your myTax return for a financial year (from late July), many dividends may already be pre-filled with the correct grossed-up amount and franking credit.
Important: Pre-filled data is not always complete. Smaller companies, managed funds, and some ETFs may not pre-fill. Always cross-check pre-filled information against your own records and statements. You are responsible for the accuracy of your return regardless of what is pre-filled.
Step 3 — Enter Dividends in myTax
In myTax, dividend income and franking credits are entered in the “Dividends” section (under “Income”). For each dividend:
- Select “Add” to add a dividend
- Enter the company or fund name
- Enter the unfranked amount (if any unfranked portion)
- Enter the franked amount (the cash dividend from a fully or partially franked dividend)
- Enter the franking credit amount
- The grossed-up total (franked amount + franking credits) is calculated automatically and added to your assessable income
myTax adds all your franking credits together and applies them as an offset against your tax payable at the end of the calculation.
Step 4 — Franking Credits From ETFs and Managed Funds
ETF and managed fund distributions that include franking credits are reported differently from direct share dividends. Your AMMA statement (Annual Managed Investment Trust Member Annual Statement) will list the components of your distribution, including:
- Australian franked dividends
- Franking credits
- Other income components (interest, rent, capital gains, etc.)
In myTax, you typically enter fund distribution components in the “Managed fund distributions” section, not the “Dividends” section. Each component is entered separately per the AMMA statement.
How the Franking Credit Offset Is Applied
After all income is entered, myTax calculates your income tax on your total taxable income. The franking credit offset is then applied:
$$\text{Tax payable} = \text{Gross income tax} + \text{Medicare levy} - \text{Franking credits} - \text{Other offsets (LITO, LMITO, etc.)}$$
If your franking credits exceed your total tax and levy payable (i.e., the result goes below zero), the excess is refunded to you as a cash payment. Franking credits are fully refundable.
Example — Retiree with $8,000 in fully franked dividends from $56,000 cash dividend:
| Item | Amount |
|---|---|
| Cash dividend received | $56,000 |
| Franking credit (30/70 of cash dividend) | $24,000 |
| Grossed-up dividend (assessable income) | $80,000 |
| Income tax on $80,000 | ~$18,967 |
| Medicare levy (2%) | $1,600 |
| Total tax and levy | $20,567 |
| Less franking credits | −$24,000 |
| Refund | $3,433 |
The 45-Day Holding Rule
To claim franking credits, you must have held the shares at risk for at least 45 days (90 days for preference shares) in the qualifying period around the ex-dividend date. If you do not meet this rule for a particular holding, you cannot claim the franking credit for that dividend. Your tax agent or myTax will guide you through this if relevant.
Related Articles
- Franking Credits Explained — How Dividend Imputation Works
- Dividend Tax in Australia — A Complete Guide
- Reporting Share Income in Your Tax Return
- ETF Tax in Australia — AMMA Statements
- Tax Offsets hub
- Taxes hub
Frequently Asked Questions
My share registry says a dividend was paid but myTax does not show it pre-filled. What should I do? Add it manually. Pre-fill is not guaranteed to capture every dividend. You are responsible for including all income — if you received a dividend and it is not pre-filled, enter it yourself using your dividend statement. Failure to include all income can result in ATO amendments and interest charges.
I hold shares through a broker — where do I find my annual dividend statement? Most Australian online brokers (CommSec, SelfWealth, Superhero, Stake) provide an annual tax report in your account portal each year (usually available from late July). This report lists all dividends received during the financial year along with franking credit amounts.
I am in a SMSF. Is claiming franking credits the same process? No. An SMSF lodges its own tax return (the SMSF Annual Return), not an individual income tax return. Franking credits are claimed in the SMSF return as a tax offset against the 15% tax payable on accumulation phase income. SMSFs in full pension phase pay 0% tax and claim franking credits as a full cash refund.
This article provides general tax information only. For advice tailored to your situation, speak with a registered tax agent. Find one through the Tax Practitioners Board register or visit MoneySmart.