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Income Tax Act 2007

Income - Exempt income

CW 61: Providing standard-cost household service

You could also call this:

“Rules for tax exemption on standard-cost household services”

If you provide a standard-cost household service, you might be able to get some of your income from it treated as exempt income. This means you won’t have to pay tax on that money. The amount that’s exempt is decided by the Tax Administration Act 1994.

If your income from the standard-cost household service isn’t exempt, and it’s more than what the service actually cost you, the government treats you as if you spent money to provide the service. This is also decided by the Tax Administration Act.

When figuring out how much you spent on the service, the government uses rules from section BD 4 of the Income Tax Act. This section helps decide which tax year your expenses belong to.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513318.

Topics:
Money and consumer rights > Taxes
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Part C Income
Exempt income

CW 61Providing standard-cost household service

  1. An amount of income derived in an income year by a natural person from providing a standard-cost household service is exempt income if the amount is exempt income under a determination made under section 91AA(2)(a) of the Tax Administration Act 1994.

  2. If subsection (1) does not apply, and the amount of standard-cost household service is less than the amount of income of the person, the person is treated, under a determination made under section 91AA of that Act, as incurring an amount of expenditure in providing the services.

  3. For the purposes of subsection (2), the allocation of the amount of the expenditure occurs under section BD 4 (Allocation of deductions to particular income years).

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