Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Tax credits paid in cash - Abating WFF tax credits

MD 15: Family scheme income for purposes of section MD 14

You could also call this:

“How to calculate family income for the Best Start tax credit”

When figuring out your family scheme income for the purposes of section MD 14, there are a few special rules you need to know about:

First, you don’t need to worry about the adjustments mentioned in section MB 1(1)(a) and (b). These won’t apply in this case.

If you get paid more than once in a month because of an extra pay period, you don’t need to count that extra pay when working out your family scheme income.

If you earn money from a job that isn’t paid through PAYE, or if you run your own business for part of the year, there’s a special way to calculate your income. You’ll need to spread out your income and any expenses you can claim evenly across the days you worked. This makes it fair for everyone, no matter when you earned the money or had expenses.

Remember, these rules are just for working out your family scheme income for section MD 14. They might not apply in other situations.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518561.

Topics:

Money and consumer rights > Taxes

MD 14: Person receiving protected family tax credit, or

"Eligibility rules for protected family tax credit based on benefit status and income"

MD 16: Additional parental tax credit abatement amount for lump sum if 70-day period crosses 2 tax years, or

"Calculating extra reduction for parental tax credit spanning two tax years"

Part M Tax credits paid in cash
Abating WFF tax credits

---

MD 15Family scheme income for purposes of section MD 14

For the purposes of section MD 14, in the calculation of family scheme income,—
section MB 1(1)(a) and (b) (Adjustments for calculation of family scheme income) does not apply; and
any income from employment that is derived in the calendar month as a result of an extra pay period that occurs in that month is disregarded; and
for a person who derives, for part of an income year, 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 income from a business, the assessable income and any expenditure incurred in deriving that income that is allowed as a deduction are treated as derived and incurred, respectively, at a uniform daily rate throughout that part of the income year.

Compare

2004 No 35 s KD 2(6C)

Notes

Section MD 15(c): amended, on 29 March 2018 (with effect on 30 March 2017), by section 164 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).