Income Tax Act 2007

en-NZ · official · sha256:969a1756483d01baa976f655731703c906c9804b8349cb9320e0040816e84b89

MA 4 Calculation of amounts of credit producing negative amounts If a calculation under this Part produces a result that is negative for the amount of a tax credit or the amount of a component of a credit, the amount of the credit or component is zero.

Referencing norms: BestStartTaxCreditNotReducedBelowZero, BestStartTaxCreditReducedToZero, FamilyTaxCreditReducedNotToZero, FamilyTaxCreditReducedToZero, InWorkTaxCreditReducedNotToZero, InWorkTaxCreditReducedToZero, MinimumFamilyTaxCreditNotBelowZero, MinimumFamilyTaxCreditReducedToZero

en-NZ · official · sha256:ae560bb2b54f5a23f943d8729a44dafec4deec8f26d7555d603cab4c78df68be

MA 7 Meaning of full-time earner and earner for family scheme Weekly employment: full-time earner (1) In subparts MB to MG and MZ, a full-time earner means a person who, for a week,— (a) is employed for 20 hours or more and does not have a spouse, civil union partner, or de facto partner during the week; or (b) has a spouse, civil union partner, or de facto partner (the partner) during the week, and either the person or the partner or both of them in total are employed for 30 hours or more. Weekly employment: earner (1B) In subparts MB to MG and MZ, an earner means a person who, for a week— (a) is employed during the week; or (b) has a spouse, civil union partner, or de facto partner (the partner) during the week and the partner or both of them are employed during the week. Modifications to weekly employment (2) For the purposes of subsections (1) and (1B),— (a) a person who is employed in a pay period that is longer than 1 week is treated as undertaking the employment activities to a uniform daily extent for the period: (b) a person who is employed becomes incapacitated as described in subsection (3) and is unable to undertake employment in a week in which but for the incapacity they would be employed as provided by subsection (1B)(a) and (b) or would be employed for the number of hours set out in subsection (1)(a) and (b) is treated as having been employed or as having been employed for the hours referred to, as the case may be: (bb) a person who has a payment period under the Compensation for Live Organ Donors Act 2016 and is employed at the start of the period is treated as being employed during the period for the hours for which the person would have been employed during the period but for the organ donation: (c) a person is treated as employed in any week in relation to which the person receives parental leave payments or preterm baby payments under Part 7A of the Parental Leave and Employment Protection Act 1987 for the number of hours that the person would have worked in a week that the person normally worked in their last period of employment before that week: (d) a person who receives or will receive weekly compensation from the Accident Compensation Corporation, Veterans’ Affairs New Zealand, or both, as a surviving spouse or partner of a deceased claimant is treated as being employed, during the week to which that compensation relates, for the number of hours that the deceased claimant would have been employed for in a week before dying, but for their incapacity. The number of hours under this paragraph are in addition to the person’s own hours. Incapacity (3) The incapacity referred to in subsection (2)(b) and (d) is an incapacity due to— (a) personal injury by accident for which an accident compensation earnings-related payment has been, is being, or will be paid: (b) a service-related (as defined in section 7 of the Veterans’ Support Act 2014) injury, illness, condition, or whole-person impairment for which a payment has been, is being, or will be paid, under the Veterans’ Support Act 2014, and the payment is— (i) weekly income compensation paid under Part 3, subpart 4 of that Act: (ii) weekly compensation paid under Part 4, subpart 5 of that Act: (iii) weekly compensation or aggregated payments, as applicable, paid under schedule 2, part 4, clause 54 or 55 of that Act.

en-NZ · official · sha256:0e75322d9993a316826652c9feeaaf59d4b3f5b9b12495881a88ffdbc5b67d49

MC 2 Who qualifies for entitlements under family scheme? A person qualifies for an entitlement under the family scheme if, for an entitlement period, they meet— (a) the qualifying criteria set out in sections MC 3 to MC 7; and (b) the continuing requirements set out in section MC 8.

Referencing norms: EntitledToAbatingWffTaxCredit, QualifiesUnderFamilyScheme

en-NZ · official · sha256:e85637614cc2b8e49d9d4c55337cfbee95608a2b6e4e9077e671d5c71e2b1883

MC 3 First requirement: person’s age The first requirement is that the person referred to in section MC 2 is 16 or older.

Referencing norms: FirstRequirementAge

en-NZ · official · sha256:c32df31155a989e080ea4599c5dfaa068c58481aba64cc00a634bb63c2aff99c

MC 4 Second requirement: principal care The second requirement is that the person referred to in section MC 2 is the principal caregiver for 1 or more dependent children.

Referencing norms: SecondRequirementPrincipalCare

en-NZ · official · sha256:0c4b25bc8abfb8c13804f4e8a7aff5da86012b294a439da2774115ab36be532b

MC 5 Third requirement: residence or entitlement to emergency benefit Third requirement (1) The third requirement is that— (a) the person referred to in section MC 2 or the child referred to in section MC 4 meets the residence requirements of subsections (2) and (3), as applicable: (b) the person referred to in section MC 2 is entitled to receive an emergency benefit under section 63 or 64 of the Social Security Act 2018. When person meets residence requirements (2) The person meets the residence requirements of subsection (1)(a) if the person— (a) has been— (i) both a New Zealand resident and present in New Zealand for a continuous period of 12 months at any time; and (ii) resident in New Zealand under section YD 1 (Residence of natural persons) on the days for which a tax credit arises under section MD 1 (Abating WFF tax credit), ME 1 (Minimum family tax credit entitlement), or MG 1 (Best Start tax credit entitlement); and (b) is not a transitional resident and is not the spouse, civil union partner, or de facto partner of a transitional resident. When child meets residence requirements (3) The child meets the residence requirements of subsection (1)(a) if the child is both a New Zealand resident and present in New Zealand for the entitlement period.

Referencing norms: ThirdRequirementResidenceOfChild, ThirdRequirementResidenceOfPerson

en-NZ · official · sha256:35029deb555cc0cfd615845f70a33995e4812f42e131455112d527ee69f4c0a3

MC 6 When person does not qualify Despite sections MC 3 to MC 5, a person does not qualify for— (a) an abating WFF tax credit or a Best Start tax credit if, during the relationship period, they receive a parent’s allowance continued by clause 3 of Schedule 1 of the Veterans’ Support Act 2014 or a children’s pension under section 72 or 75 of that Act: (b) an in-work tax credit, parental tax credit, or minimum family tax credit if, during the relationship period, they receive— (i) a main benefit; or (ii) [Repealed] (iii) a parent’s allowance or a children’s pension: (c) a Best Start tax credit for a dependent child in relation to a period, if they receive— (i) a parental leave payment or preterm baby payment, under Part 7A of the Parental Leave and Employment Protection Act 1987, for the dependent child in relation to the period: (ii) a parental tax credit, in relation to the dependent child: (iii) a parent’s allowance or a children’s pension, in relation to the dependent child.

Referencing norms: ExcludedByParentsAllowance, ParentsAllowanceDefeatsAbatingWff

en-NZ · official · sha256:3d9b48d94b98a5108ecf2547b951bcbd3923b30004842e195961b7162a708a4e

MC 7 When spouse or partner entitled under family scheme When this section applies (1) This section applies when a person has a spouse, civil union partner, or de facto partner throughout an entitlement period, and during the period— (a) the person meets the criteria in sections MC 3 to MC 5 in relation to 1 or more dependent children; and (b) the spouse or partner meets the criteria in sections MC 3 to MC 5 in relation to 1 or more dependent children; and (c) the dependent child, or at least 1 of the dependent children, referred to in paragraph (b) is not a dependent child referred to in paragraph (a). Single person (2) In the circumstances described in subsection (1),— (a) this section applies as if— (i) the person or their spouse or partner meets the qualifying criteria in relation to all those children; and (ii) the other person does not meet the qualifying criteria in relation to any of the children; and (b) for all WFF tax credits other than the in-work tax credit, the Commissioner must determine which of the persons referred to in paragraph (a) meets the qualifying criteria.

en-NZ · official · sha256:965932590fb7254fb73284ece23bc3f66fec9d4a679584f3837455c701cec56e

MC 8 Continuing requirements Requirements for entitlement period (1) To receive entitlements and tax credits under the family scheme, a person who meets the qualifying criteria set out in sections MC 3 to MC 7 must also meet the following requirements throughout the entitlement period: (a) the person meets the qualifying criteria on each day of the period; and (b) another person does not on any day start or stop being a spouse, civil union partner, or de facto partner of the person; and (c) the person does not start or stop being the principal caregiver of a dependent child other than on the first or, as applicable, the last day; and (d) a child for whom the person is the principal caregiver does not stop being a dependent child other than on the first or, as applicable, the last day; and (e) the composition of a WFF tax credit does not change, other than on the first, or as applicable, the last day; and (f) the person does not start or stop being a person receiving protected family tax credit, other than on the first, or as applicable, the last day. Relationship with section MD 6(2) (2)

Referencing norms: QualifiesUnderFamilyScheme

en-NZ · official · sha256:c2cbedaadc4310fcb0b411d9ae0fd8c83bc9f3b8c4cb4307afc7f683f1b1e2b9

MD 1 Abating WFF tax credit Tax credit (1) A person who qualifies under section MC 2 (Who qualifies for entitlements under family scheme?) is entitled to a tax credit (the abating WFF tax credit) equal to an amount calculated using the formula in subsection (2). Formula (2) The formula is— family tax credit + (in-work tax credit or child tax credit) + parental tax credit − credit abatement. Definition of items in formula (3) In the formula,— (a) family tax credit is the family tax credit for the entitlement period calculated using the formula in section MD 3: (b) in-work tax credit or child tax credit is 1 of the following, as applicable: (i) the in-work tax credit for the entitlement period calculated using the formula in section MD 10, if the person is entitled to the in-work tax credit for the entitlement period: (ii) the amount of child tax credit for the entitlement period calculated using the formula in section MZ 2 (Calculation of child tax credit), if the person is not entitled to the in-work tax credit for the entitlement period, and is entitled to the child tax credit for the entitlement period under section MZ 1 (Entitlement to child tax credit): (c) parental tax credit is the total amount, for the entitlement period, of parental tax credit calculated using— (i) the formula in section MD 12; and (ii) the formula in section MD 12B(2), if section MD 12B applies, and if the entitlement period includes the day described in section MD 12B(3)(a)(i) or (ii): (d) credit abatement is the total amount, for the entitlement period, of— (i) a family credit abatement calculated using the formula in section MD 13(2), and modified, if the item parental tax credit in paragraph (c) is greater than zero, by section MD 2(3) and (4); and (ii) an amount of parental tax credit abatement calculated using the formula in section MD 16(2), if section MD 16 applies, and if the entitlement period includes the day described in section MD 16(3)(a)(i) or (ii). Extra instalment (4) This section is overridden by section 80KW of the Tax Administration Act 1994.

Referencing norms: AbatingWffTaxCredit, EntitledToAbatingWffTaxCredit, InWorkComponentAbsent, InWorkComponentIsTheReducedCredit, InWorkCreditPresent

en-NZ · official · sha256:9f5d523c824cd45906eda51c912cbd5e458f1fd74066532a252f165c47f3e4f2

MD 10 Calculation of in-work tax credit Entitlement (1) A person who meets the requirements of section MD 4 is entitled to an in-work tax credit calculated using the formula in subsection (2). Formula (2) The formula is— (amount A + amount B × (children − 3)) × weekly periods ÷ 52. Definition of items in formula (3) In the formula,— (a) amount A is $5,070: (b) amount B is $780: (c) children is the greater of— (i) 3; and (ii) the number of children for whom the person is allowed the in-work tax credit: (d) weekly periods— (i) for 2 or more entitlement periods forming 1 continuous period, is the number of whole periods of 1 week in the continuous period for which the person or their spouse, civil union partner, or de facto partner has, from the work activity, income to which section MD 9(2) refers or is an earner described in section MD 9(1)(b), and includes whole periods of 1 week to which the alternative requirement in section MD 9(6) applies: (ii) for an entitlement period to which subparagraph (i) does not apply, is the number of whole periods of 1 week in the entitlement period for which the person or their spouse, civil union partner, or de facto partner has, from the work activity, income to which section MD 9(2) refers or is an earner described in section MD 9(1)(b), and includes whole periods of 1 week to which the alternative requirement in section MD 9(6) applies. Order in Council increasing amount (4) In subsection (3)(a) and (b), the amount referred to may be increased as prescribed by the Governor-General by Order in Council under section MF 7 (Orders in Council).

Referencing norms: InWorkFullYearAmountAboveThreeChildren, InWorkFullYearAmountUpToThreeChildren, InWorkTaxCreditAmount, InWorkTaxCreditAmountA/value/urn%3Anz%3Acorpus%3Aclir%3Awff-tax-credits%3Aparam%3Ain-work-tax-credit-amount-a%232024-07-31/definition, InWorkTaxCreditAmountB/value/urn%3Anz%3Acorpus%3Aclir%3Awff-tax-credits%3Aparam%3Ain-work-tax-credit-amount-b%232024-07-31/definition

en-NZ · official · sha256:20fadf41322f4619240301a4acaab3a723e0aa77b13a39a7d436ba12efd740e5

MD 13 Calculation of family credit abatement When this section applies (1) This section applies for the purposes of section MD 1 to determine the amount of a person’s family credit abatement for an entitlement period. Formula (2) The formula is— full-year abatement × days ÷ 365. Definition of items in formula (3) In the formula,— (a) full-year abatement is,— (i) if the person has no spouse, civil union partner, or de facto partner during the entitlement period, and the person’s family scheme income for the relationship period containing the entitlement period is more than $42,700, 27 cents for each complete dollar of the excess; or (ii) if the person has a spouse, civil union partner, or de facto partner during the entitlement period, and the person’s family scheme income, the family scheme income of their spouse, civil union partner, or de facto partner, or the sum of those incomes for the relationship period containing the entitlement period is more than $42,700, 27 cents for each complete dollar of the excess: (b) days is the number of days in the entitlement period excluding the days of any calendar months in which the person receives protected family tax credit as described in section MD 14. When 70-day period crosses 2 tax years and parental tax credit paid in instalments (4) If a person who qualifies under section MC 2 (Who qualifies for entitlements under family scheme?) receives instalments of the parental tax credit in a 70-day period that crosses 2 tax years, the formula is applied so that— (a) instalments of the parental tax credit received in the first tax year are abated against the person’s family scheme income, the family scheme income of their spouse, civil union partner, or de facto partner, or the sum of those incomes for that tax year; and (b) instalments of the parental tax credit received in the second tax year are abated against the person’s family scheme income, the family scheme income of their spouse, civil union partner, or de facto partner, or the sum of those incomes for that tax year. When 70-day period crosses 2 tax years and parental tax credit paid in lump sum (4B) If a person who qualifies under section MC 2 has a 70-day parental entitlement period that crosses 2 tax years and the person receives a lump sum payment of the parental tax credit for the tax year of the birth, then— (a) an additional amount of parental tax credit abatement for the tax year of the birth is calculated under section MD 16, based on the number of days that are— (i) in the parental entitlement period; and (ii) in an entitlement period in the tax year following the tax year of the birth; and (b) the formula in subsection (2) should not be used to calculate an amount of parental tax credit abatement for the days described in paragraph (a), except for the purposes of determining the amount of parental tax credit abatement for the single day described in section MD 16(3)(a)(ii). Order in Council increasing amount (5) In subsection (3)(a), the amounts appearing as the amount of the threshold may be increased as prescribed by the Governor-General by Order in Council under section MF 7 (Orders in Council).

Referencing norms: AbatementIncomeWithPartner, AbatementIncomeWithoutPartner, FamilyCreditAbatement, FamilyCreditAbatementRate/value/urn%3Anz%3Acorpus%3Aclir%3Awff-tax-credits%3Aparam%3Afamily-credit-abatement-rate%232024-07-31/definition, FamilyCreditAbatementThreshold/value/urn%3Anz%3Acorpus%3Aclir%3Awff-tax-credits%3Aparam%3Afamily-credit-abatement-threshold%232024-07-31/definition, FullYearAbatement, IncomeAboveThreshold, IncomeNotAboveThreshold

en-NZ · official · sha256:9f88a06c76987181b7906a5063dc58f2b09439e844d16046b6cd7bd69a9a50c0

MD 2 Calculating net contributions to credits When this section applies (1) This section applies when the Commissioner calculates the amounts making up the family tax credit, the in-work tax credit, the child tax credit, and the parental tax credit that relate to a period under this subpart. Calculating net contributions (2) The Commissioner must— (a) treat the family tax credit, the in-work tax credit, the child tax credit, and the parental tax credit as tax credits corresponding to the period; and (b) treat as a debit the amount of family credit abatement corresponding to the period; and (c) apply the amount of the family credit abatement corresponding to the period,— (i) first, to reduce the amount of the family tax credit corresponding to the period; and (ii) second, to reduce the amount of the in-work tax credit or, as applicable, the child tax credit corresponding to the period; and (iii) third, to reduce the amount of the parental tax credit corresponding to the period. Calculation for parental tax credit (3) For the purposes of subsection (2)(c)(iii) and sections MD 1(3)(d)(i) and MD 16(3)(a), the amount of family credit abatement for an entitlement period applied to reduce the amount of parental tax credit for that entitlement period is calculated using the formula— (entitlement period abatement amount − amount used) × 365 ÷ 70. Definition of items in formula (4) In the formula,— (a) entitlement period abatement amount is the family credit abatement for the entitlement period within the parental entitlement period calculated using the formula in section MD 13(2): (b) amount used is the amount of the entitlement period abatement amount that the Commissioner must apply under subsection (2)(c)(i) and (ii) in calculating a net contribution for the entitlement period.

Referencing norms: AbatementFullyAbsorbedByFamilyTaxCredit, AbatementRemainderPassesToInWorkTaxCredit, ApplyAbatementInOrder, ApplyAbatementInOrderDuty, FamilyTaxCreditReducedNotToZero, FamilyTaxCreditReducedToZero, InWorkComponentIsTheReducedCredit, InWorkCreditPresent, InWorkTaxCreditReducedNotToZero, InWorkTaxCreditReducedToZero

en-NZ · official · sha256:c68f751a943bb5b68e8c6704f32d8cc9bf1a879bbd191a6c82b5d60cf30889cc

MD 3 Calculation of family tax credit Entitlement (1) A person who qualifies under section MC 2 (Who qualifies for entitlements under family scheme?) is entitled to an amount of family tax credit calculated using the formula in subsection (2). Formula (2) The formula is— prescribed amount × days ÷ 365. Definition of items in formula (3) The items in the formula are defined in subsections (4) and (5). Prescribed amount (4) Prescribed amount is the sum of the following amounts: (a) for the eldest dependent child for whom the person is a principal caregiver during the entitlement period, $7,524; and (b) for each dependent child for whom the person is a principal caregiver during the entitlement period, other than the eldest dependent child, $6,130. Days (5) Days is the number of days in the entitlement period. Order in Council increasing amount (6) In subsection (4)(a) and (b), the amount referred to may be increased as prescribed by the Governor-General by Order in Council under section MF 7 (Orders in Council). When another person cares for dependent child (7) A family tax credit must be reduced in proportion to the time in the entitlement period that a dependent child spends in the exclusive care of another person who qualifies under section MC 2.

Referencing norms: FamilyTaxCreditAmount, FamilyTaxCreditEldestChild/value/urn%3Anz%3Acorpus%3Aclir%3Awff-tax-credits%3Aparam%3Afamily-tax-credit-eldest-child%232024-07-31/definition, FamilyTaxCreditPrescribedAmount, FamilyTaxCreditSubsequentChild/value/urn%3Anz%3Acorpus%3Aclir%3Awff-tax-credits%3Aparam%3Afamily-tax-credit-subsequent-child%232024-07-31/definition

en-NZ · official · sha256:8da24c922b8b77da7f7ffa52f777945584fb93cc62b75551d27b5dacf55f9e73

MD 4 Entitlement to in-work tax credit Requirements (1) A person is entitled to an in-work tax credit for a child if, for an entitlement period, the person meets the 5 requirements of sections MD 5 to MD 9. When another person entitled to in-work tax credit or child tax credit (2) If 2 persons are entitled to an in-work tax credit or a child tax credit for a child for an entitlement period, the entitlement of each is not affected by the entitlement of the other person.

Referencing norms: EntitledToInWorkTaxCredit

en-NZ · official · sha256:a06c55ca8a51a14fd70d4a2ba398976c95a6f69f1669fa328313f2eca6af0460

MD 5 First requirement: person’s age The first requirement for an entitlement to an in-work tax credit is that the person referred to in section MD 4 is 16 or older.

Referencing norms: InWorkFirstRequirementAge

en-NZ · official · sha256:5460165cb8c217fe34c1b5384dcd091be7f81bb74f7ce20e635a8b53006662be

MD 6 Second requirement: principal care When child financially dependent (1) The second requirement for an entitlement to an in-work tax credit is that the person referred to in section MD 4 is the principal caregiver for a child who is financially dependent on them. Inclusions (2) A child for whom payments are made under section 363 of the Oranga Tamariki Act 1989, or a child for whom an orphan’s benefit or an unsupported child’s benefit is paid, is treated as financially dependent on the person. Relationship with section MC 8 (3) Subsection (2) overrides section MC 8 (Continuing requirements).

Referencing norms: InWorkSecondRequirementCare

en-NZ · official · sha256:3c4a511f877b679495d2e527f0101b2cd2cf8f0c31a267e64c41cb06629f9b2e

MD 7 Third requirement: residence Third requirement (1) The third requirement for an entitlement to an in-work tax credit is that the person or child referred to in section MD 4 meet the residence requirements of subsections (2) and (3), as applicable. When person meets residence requirements (2) The person meets the residence requirements of subsection (1) if the person— (a) has been— (i) both a New Zealand resident and present in New Zealand for a continuous period of 12 months at any time; and (ii) resident in New Zealand under section YD 1 (Residence of natural persons) on the days for which a tax credit arises under section MD 1; and (b) is neither a transitional resident, nor the spouse, civil union partner, or de facto partner of a transitional resident. When child meets residence requirements (3) The child meets the residence requirements of subsection (1) if the child is both resident and present in New Zealand for the entitlement period.

Referencing norms: InWorkThirdRequirementResidenceOfPerson

en-NZ · official · sha256:6f7e7d177f1d65f0b9f61da4475e167c8d285db46286c6400d0c4e040437f3dc

MD 8 Fourth requirement: person not receiving benefit The fourth requirement for an entitlement to an in-work tax credit is that the person referred to in section MD 4 and their spouse, civil union partner, or de facto partner, do not receive— (a) a main benefit; or (b) a basic grant and an independent circumstances grant made under regulations made under section 645 of the Education and Training Act 2020 or an enactment substituted for that section; or (c) a parent’s allowance continued by clause 3 of Schedule 1 of the Veterans’ Support Act 2014 or a children’s pension under section 72 or 75 of that Act.

Referencing norms: InWorkFourthRequirementNoBenefit

en-NZ · official · sha256:8d53380a3aeada44715e1795fc623604ea2ef2085a8fe5a6792dedc8a49db5b0

MD 9 Fifth requirement: earner Normally earner (1) The fifth requirement for an entitlement to an in-work tax credit is that either or both the person referred to in section MD 4 and their spouse, civil union partner, or de facto partner, is normally an earner (the earner). Also, the earner must— (a) derive income as set out in subsections (2) and (3) as an earner, or derive an amount of compensation described in subsection (4), or not derive income but meet the alternative requirements in subsection (6); or (b) if they are an earner in relation to a close company, be a major shareholder in the close company, and the company must derive gross income in the income year. Income (2) The income referred to in subsection (1)(a) is— (a) a PAYE income payment that is— (i) not excluded under subsection (3), although it does not matter if the person also derives income of the type described in subsection (3); and (ii) not a benefit or allowance described in section MD 8; or (b) income, other than from a PAYE income payment, to which section RD 3B or RD 3C (which relate to income other than PAYE) applies; or (c) income from a business carried on for profit; or (d) an amount paid or benefit provided— (i) by a person (the claimant), who receives a personal service rehabilitation payment from which an amount of tax has been withheld at a rate specified in section RD 10B (Amounts of tax for schedular payments); and (ii) to another person for providing to the claimant a key aspect of social rehabilitation referred to in paragraph (c) of the definition of personal service rehabilitation payment in section YA 1 (Definitions). Exclusions from income (3) The following PAYE income payments are excluded from income under subsection (2): (a) a payment referred to in paragraphs (a) to (c) of the definition of accident compensation earnings-related payment: (b) a PAYE income payment referred to in section RD 5(6)(a) (Salary or wages), other than a parental leave payment or preterm baby payment referred to in section CF 1 (Benefits, pensions, compensation, and government grants): (c) a PAYE income payment referred to in section RD 5(6)(bb), (bc), or (bd): (d) a schedular payment that is a contract payment for a contract activity or service of a non-resident contractor: (e) an amount paid as a result of incapacity, suffered before 1 January 2006, due to personal injury by accident within the meaning of section 26 of the Accident Compensation Act 2001. Compensation payments for incapacities suffered between 1 January 2006 and 31 March 2006 (4) A person meets the fifth requirement if— (a) they received a child tax credit for an entitlement period ending on 31 March 2006; and (b) between 1 January 2006 and 31 March 2006 (both dates inclusive), they or their spouse, civil union partner, or de facto partner suffered an incapacity due to personal injury by accident within the meaning of section 26 of the Accident Compensation Act 2001; and (c) weekly compensation within the meaning of section 6 of the Accident Compensation Act 2001 is being or will be paid for the incapacity; and (d) at the time of the incapacity, the person or their spouse, civil union partner, or de facto partner— (i) was deriving, as a full-time earner, income as set out in subsections (2) and (3), as those subsections were immediately before the amendment made by section 360(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009; and (ii) would have been eligible for the tax credit calculated using the formula in section MD 10, as that section was immediately before the amendments made by section 127(1) and (3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012, had this Act come into force before the date of the incapacity. Absence from work due to birth of child (5) Despite subsection (1), a person also meets the fifth requirement if they normally derive income as set out in subsections (2) and (3) as a full-time earner but, in a 1-week period, they do not work, or work less than, the number of hours required to be a full-time earner because of the birth of a child. However, this subsection applies only if the person is entitled to receive the parental tax credit for the child. 14 day concession (6) A person meets the fifth requirement if they do not derive income or otherwise do not meet the fifth requirement, but have met the fifth requirement within the last 14 days.

Referencing norms: InWorkFifthRequirementEarner

en-NZ · official · sha256:65d9b2a81fc37f28b932751004fab0733f386a036774c7ff5a11b8115f1152b5

ME 1 Minimum family tax credit Tax credit (1) A person who qualifies under sections MC 3 to MC 6 (which relate to the qualifying criteria) is entitled to a tax credit (the minimum family tax credit) for an entitlement period equal to an amount calculated using the formula in subsection (2). Formula (2) The formula is— (prescribed amount − net family scheme income) × weekly periods ÷ 52. Definition of items in formula (3) In the formula,— (a) prescribed amount is $35,316: (b) net family scheme income is the net family scheme income, calculated using the formula in section ME 3, for a relationship period containing the entitlement period, of— (i) the person; or (ii) their spouse, civil union partner, or de facto partner; or (iii) the person and their spouse, civil union partner, or de facto partner: (c) weekly periods is the number of periods of 1 week in the entitlement period for which the person is a full-time earner. Order in Council increasing amount (4) In subsection (3)(a), the amount referred to may be increased as prescribed by the Governor-General by Order in Council under section MF 7 (Orders in Council). Relationship with section 80KW of the Tax Administration Act 1994 (5) This section is overridden by section 80KW of the Tax Administration Act 1994.

Referencing norms: MinimumFamilyTaxCreditNotBelowZero, MinimumFamilyTaxCreditPrescribedAmount/value/urn%3Anz%3Acorpus%3Aclir%3Awff-tax-credits%3Aparam%3Aminimum-family-tax-credit-prescribed-amount%232024-07-31/definition, MinimumFamilyTaxCreditRaw, MinimumFamilyTaxCreditReducedToZero, net_family_scheme_income, weekly_periods_as_full_time_earner

en-NZ · official · sha256:24f228906d641b67917298b2ba790d265577826641743b00b7b66bde9dbd23de

ME 2 Meaning of employment for this subpart Meaning (1) For the purposes of the calculation of a minimum family tax credit, employment in the definition of full-time earner, means the activity of a person that gives rise, or will give rise, to an entitlement to a PAYE income payment other than— (a) a payment of any of the kinds referred to in section RD 5(3) and (6)(b), (bb), (bc), (bd), and (c) (Salary or wages): (b) a schedular payment that is a contract payment for a contract activity or service of a non-resident contractor: (c) a payment made by a close company to a person who is a major shareholder of the close company: (d) a payment made by a person to their spouse, civil union partner, or de facto partner: (e) a payment made by a business carried on by 2 or more persons jointly, whether in partnership or otherwise, to a spouse, civil union partner, or de facto partner of 1 of the persons in business. When subsections (3) and (4) apply (2) Subsections (3) and (4) apply when a person— (a) receives a PAYE income payment; and (b) on the date of receipt— (i) does not undertake any employment; or (ii) performs an activity to an extent less than would give rise to an entitlement to the PAYE income payment. Commissioner’s determination (3) The Commissioner may treat the person as having undertaken the employment or performed the activity that would have given rise to the PAYE income payment. Considerations (4) The Commissioner must have regard to— (a) the date of receipt of the PAYE income payment; and (b) the pay period in which the PAYE income payment occurs; and (c) the circumstances giving rise to the PAYE income payment; and (d) any other matters that the Commissioner considers relevant.

en-NZ · official · sha256:132621655e49aa47663df3352b03ade3b1cdb2f1d50e99cb98818c6a204f8ac8

ME 3 Meaning of net family scheme income When this section applies (1) This section applies for the purposes of this subpart. Formula (2) Net family scheme income, for a person and a relationship period, means the amount calculated using the formula— adjusted income − adjusted liability + amount received − amount paid. Definition of items in formula (3) In the formula,— (a) adjusted income is— (i) the amount of the person’s family scheme income for the tax year in which the relationship period falls that is attributable to the number of weeks in which the person is a full-time earner, adjusted to an annualised amount that is found by multiplying the amount by the fraction that is 52 divided by the number of weeks in the relationship period for which the person is a full-time earner; and (ii) calculated without reference to the amounts referred to in section MB 1(2) and (3): (b) [Repealed] (c) adjusted liability is the amount that would be the person’s income tax liability— (i) treating the amount of adjusted income under paragraph (a) as if it were the person’s net income: (ii) [Repealed] (d) amount received is the amount referred to in section MB 1(2) for the tax year: (e) amount paid is the amount of the deduction referred to in section MB 1(3) for the tax year.

en-NZ · official · sha256:8b6194fbdc5ca31337f35903e17e121e010f4e241cc701d47f0b2f208cd5cc80

MF 7 Orders in Council What may be done by Order in Council (1) The Governor-General may, by Order in Council,— (a) increase the amounts in section MD 3(4)(a) and (b) (Calculation of family tax credit) by amounts that— (i) correspond to the movement in the Consumers Price Index (all groups) after the quarter ended with 30 September 2021 that has not yet been taken into account by an increase: (ii) are rounded up to the nearest whole dollar, without affecting the calculation of later increases made under this paragraph: (ab) [Repealed] (b) increase the amounts appearing as items in the formula for the in-work tax credit set out in section MD 10(3) (Calculation of in-work tax credit): (c) [Repealed] (cb) increase the amounts appearing as the amount of the threshold set out in section MD 13(3): (d) increase the amount appearing as an item in the formula for the minimum family tax credit in section ME 1(3) (Minimum family tax credit): (db) change the amounts in section MG 2(2)(a) (Best Start tax credit) by an amount that— (i) corresponds to the movement in the Consumers Price Index (all groups) after the quarter ended with 30 September 2021 that has not yet been taken into account by an increase: (ii) is rounded up to the nearest whole dollar, without affecting the calculation of later increases made under this paragraph: (dc) change the amounts in section MG 3(2)(a) (Best Start tax credit abatement): (e) replace schedule 31 (Annualised equivalent amount for Part M). Order in Council under subsection (1)(a): requirements (2) An Order in Council under subsection (1)(a),— (a) [Repealed] (b) in the case of the first Order in Council made under subsection (1)(a) after the date on which the Taxation (COVID-19 Support Payments and Working for Families Tax Credits) Act 2021 receives the Royal assent, must be made when the total percentage increase in the movement in the Consumers Price Index (all groups) measured from that applying on 1 October 2021 is 5% or more: (c) in the case of a subsequent Order in Council under subsection (1)(a), must be made when the total percentage increase in the movement in the Consumers Price Index (all groups) measured from that applying on the date when the requirement to make the immediately preceding adjustment arose is 5% or more. Order in Council under subsection (1)(db): requirements (2BA) An Order in Council under subsection (1)(db),— (a) in the case of the first Order in Council made under subsection (1)(db) after the date on which the Taxation (COVID-19 Support Payments and Working for Families Tax Credits) Act 2021 receives the Royal assent, must be made when the total percentage increase in the movement in the Consumers Price Index (all groups) measured from that applying on 1 October 2021 is 5% or more: (b) in the case of a subsequent Order in Council under subsection (1)(db), must be made when the total percentage increase in the movement in the Consumers Price Index (all groups) measured from that applying on the date when the requirement to make the immediately preceding adjustment arose is 5% or more. How movement in CPI determined (2B) For the purposes of subsections (1)(a)(i) and (db)(i), (2), and (2BA), a movement in the Consumers Price Index (all groups) over a period is determined by comparing the following numbers: (a) the number that, when the period started, was the most recent quarterly index number of the Consumers Price Index (all groups): (b) the number that, when the period ended, was the most recent quarterly index number of the Consumers Price Index (all groups). Order in Council under subsection (1)(ab)[Repealed] (2C) [Repealed] Timing of Order in Council (3) An Order in Council made under this section must be published under the Legislation Act 2019 no later than 1 December in each year and must apply from 1 April following that date. Secondary legislation (3B) An Order in Council under this section is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements). Review of in-work tax credit (4) The Minister responsible for the Inland Revenue Department, in consultation with the Minister responsible for the department currently responsible for administering the Social Security Act 2018, must cause a review to be undertaken of the amounts of the in-work tax credit allowable under subparts MB to MF and MZ. Timing of review (5) A review undertaken under subsection (4) must occur,— (a) in the case of the first review, not later than 30 June 2008; and (b) in the case of subsequent reviews, not later than 30 June in the third year after each preceding review. Definitions (6) In this section, Consumers Price Index (all groups) means the Consumers Price Index (all groups) published by Statistics New Zealand or, if that index ceases to be published, any measure certified by the Government Statistician as being equivalent to that index. See secondary legislation made under this Act (if published on this website)

en-NZ · official · sha256:494f478291433b159429109d45ebef4dbacf3e218bb8955cc7e26e2ab75e8c78

MG 1 Best Start tax credit entitlement Best Start tax credit for dependent child (1) A person is entitled to a tax credit, the Best Start tax credit, for an entitlement period for a dependent child equal to an amount calculated using the formula in subsection (2), if— (a) the person qualifies under section MC 2 (Who qualifies for entitlements under family scheme?); and (b) the person is a principal caregiver for the dependent child during the entitlement period; and (c) the dependent child is aged less than 3 years old; and (d) the dependent child is born— (i) on or after 1 July 2018; or (ii) before 1 July 2018, but the expected due date for the child is on or after 1 July 2018. Best Start tax credit formula (2) The formula is— Best Start tax credit − credit abatement. Definition of items in formula (3) In the formula,— (a) Best Start tax credit is the person’s Best Start tax credit for the entitlement period for the dependent child, calculated using the formula in section MG 2: (b) credit abatement is the person’s Best Start credit abatement, calculated using the formula in section MG 3. Extra instalment (4) This section is overridden by section 80KW of the Tax Administration Act 1994.

Referencing norms: BestStartTaxCreditNotReducedBelowZero, BestStartTaxCreditReducedToZero, BornBeforeButDueDateOnOrAfterThreshold, BornOnOrAfterThreshold, EntitledToBestStartTaxCredit, best_start_full_care_confirmed, dependent_child_aged_under_three, dependent_child_date_of_birth, dependent_child_expected_due_date

en-NZ · official · sha256:2ccfe6cc50ebe1ab67c2756dc6cc23620baa6a1214b2171bb35c25762dc76df9

MG 2 Best Start tax credit Best Start tax credit for dependent child (1) For the purposes of section MG 1(3)(a), the person’s Best Start tax credit for the entitlement period for the dependent child is calculated using the formula— prescribed amount × days ÷ 365. Definition of items in formula (2) In the formula,— (a) prescribed amount is, for the dependent child, $3,838: (b) days is the number of days in the entitlement period. If dependent child dies during entitlement period (3) The person continues to be entitled to the Best Start tax credit for 4 weeks after the dependent child dies, if the person otherwise meets the requirements of section MG 1(1). Order in Council increasing amount (4) The amount in subsection (2)(a) may be changed as prescribed by the Governor-General by Order in Council under section MF 7 (Orders in Council). When another person cares for dependent child (5) A Best Start tax credit must be reduced in proportion to the time in the entitlement period that the dependent child spends in the exclusive care of another person who qualifies under section MC 2 (Who qualifies for entitlements under family scheme?).

Referencing norms: BestStartPrescribedAmount/value/urn%3Anz%3Acorpus%3Aclir%3Awff-tax-credits%3Aparam%3Abest-start-prescribed-amount%232024-04-01/definition, BestStartTaxCreditAmount

en-NZ · official · sha256:6de7ea3a228c912d873043e0fa7cb0139e7acf87eb4393eab74046ae80d21453

MG 3 Best Start credit abatement When this section applies (1) For the purposes of section MG 1(3)(b) the person’s Best Start credit abatement for the entitlement period is calculated using the formula— full-year abatement × days ÷ 365. Definition of items in formula (2) In the formula,— (a) full-year abatement is,— (i) if the person has no spouse, civil union partner, or de facto partner during the entitlement period, and the person’s family scheme income for the relationship period containing the entitlement period is more than $79,000, 21 cents for each complete dollar of the excess; or (ii) if the person has a spouse, civil union partner, or de facto partner during the entitlement period, and the person’s family scheme income, the family scheme income of their spouse, civil union partner, or de facto partner, or the sum of those incomes for the relationship period containing the entitlement period is more than $79,000, 21 cents for each complete dollar of the excess: (b) days is the number of days in the entitlement period excluding— (i) the days on which the dependent child is less than 1 year old: (ii) the days of any calendar months in which the person receives protected Best Start tax credit as described in section MG 4. Order in Council increasing amount (3) The amounts in subsection (2)(a) may be changed as prescribed by the Governor-General by Order in Council under section MF 7 (Orders in Council).

Referencing norms: BestStartAbatementRate/value/urn%3Anz%3Acorpus%3Aclir%3Awff-tax-credits%3Aparam%3Abest-start-abatement-rate%232018-07-01/definition, BestStartAbatementThreshold/value/urn%3Anz%3Acorpus%3Aclir%3Awff-tax-credits%3Aparam%3Abest-start-abatement-threshold%232018-07-01/definition, BestStartCreditAbatement, BestStartFullYearAbatement, BestStartIncomeAboveThreshold, BestStartIncomeNotAboveThreshold, best_start_abatement_days_not_reduced

en-NZ · official · sha256:4ca71080a9aeffcd7e2bdff91bbaf208c705922eec5b1a4be283012e2c92dcf7

MG 4 Person receiving protected Best Start tax credit Requirements (1) For the purposes of section MG 3(2)(b)(ii), a person who receives protected Best Start tax credit for a calendar month in an entitlement period, is a person who, in the calendar month,— (a) has no spouse, civil union partner, or de facto partner, receives a main benefit, and derives family scheme income that is less than the amount set out in section MG 3(2)(a)(i): (b) has a spouse, civil union partner, or de facto partner, receives a main benefit, and derives family scheme income that together with the family scheme income of their spouse, civil union partner, or de facto partner is less than the amount set out in section MG 3(2)(a)(ii). Annualised equivalent (2)