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Income Tax Act 2007

Tax credits paid in cash - Abating WFF tax credits

MD 1: Abating WFF tax credit

You could also call this:

“How to calculate your Working for Families tax credit”

If you qualify under section MC 2, you can get a tax credit called the abating WFF tax credit. The amount you get is calculated using a formula.

The formula adds together your family tax credit, either your in-work tax credit or child tax credit (whichever applies to you), and your parental tax credit. Then it subtracts your credit abatement.

Your family tax credit is worked out using the formula in section MD 3.

For the in-work tax credit or child tax credit part:

  • If you’re entitled to the in-work tax credit, it’s calculated using the formula in section MD 10.
  • If you’re not entitled to the in-work tax credit but are entitled to the child tax credit, it’s calculated using the formula in section MZ 2.

Your parental tax credit is calculated using formulas from section MD 12 and sometimes section MD 12B(2).

The credit abatement includes a family credit abatement (calculated using section MD 13(2)) and sometimes a parental tax credit abatement (calculated using section MD 16(2)).

This section can be overridden by section 80KW of the Tax Administration Act 1994.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518504.

Topics:
Money and consumer rights > Taxes
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MC 11: Relationship periods and entitlement periods, or

“Time periods for determining tax credit eligibility”

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MD 2: Calculating net contributions to credits, or

“How tax credits are reduced by family credit abatement”

Part M Tax credits paid in cash
Abating WFF tax credits

MD 1Abating WFF 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).

  2. The formula is—

    family tax credit + (in-work tax credit or child tax credit) + parental tax credit − credit abatement.

    Where:

    • In the formula,—

    • family tax credit is the family tax credit for the entitlement period calculated using the formula in section MD 3:
      1. in-work tax credit or child tax credit is 1 of the following, as applicable:
        1. 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:
          1. 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):
          2. parental tax credit is the total amount, for the entitlement period, of parental tax credit calculated using—
            1. the formula in section MD 12; and
              1. 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):
              2. credit abatement is the total amount, for the entitlement period, of—
                1. 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
                  1. 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).

                  2. This section is overridden by section 80KW of the Tax Administration Act 1994.

                  Compare
                  Notes
                  • Section MD 1 heading: substituted, on , by section 466(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                  • Section MD 1(1): amended, on , by section 466(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                  • Section MD 1(2) formula: amended, on , by section 466(3)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                  • Section MD 1(2) formula: amended, on , by section 466(3)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                  • Section MD 1(2) formula: amended, on , by section 466(3)(c) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                  • Section MD 1(3)(a): amended, on , by section 466(4) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                  • Section MD 1(3)(b): amended, on , by section 466(5) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                  • Section MD 1(3)(b)(i): amended, on , by section 466(5) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                  • Section MD 1(3)(b)(ii): amended, on , by section 466(5) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                  • Section MD 1(3)(c): replaced (with effect on 1 April 2008), on , by section 168(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                  • Section MD 1(3)(d): replaced (with effect on 1 April 2015 and applying for dependent children born on or after that date), on , by section 168(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                  • Section MD 1 list of defined terms abating WFF tax credit: inserted, on , by section 466(7)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                  • Section MD 1 list of defined terms family support: repealed, on , by section 466(7)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                  • Section MD 1 list of defined terms family tax credit: inserted, on , by section 466(7)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                  • Section MD 1 list of defined terms in-work payment: repealed, on , by section 466(7)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                  • Section MD 1 list of defined terms in-work tax credit: inserted, on , by section 466(7)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).