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Income Tax Act 2007

Tax credits paid in cash - Minimum family tax credit

ME 1: Minimum family tax credit

You could also call this:

“Tax credit for low-income families with full-time workers”

If you meet certain criteria, you can get a tax credit called the minimum family tax credit. The amount you get depends on a calculation.

The calculation takes the prescribed amount of $35,316 and subtracts your net family scheme income. This difference is then multiplied by the number of weeks you worked full-time during the entitlement period, divided by 52.

Your net family scheme income includes your income and possibly your partner’s income too. It’s worked out using a formula in another part of the law.

The prescribed amount of $35,316 might change. The Governor-General can increase it by making an official order.

There’s another law that can override this one. It’s called 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=DLM1518564.

Topics:

Money and consumer rights > Taxes

Family and relationships > Children and parenting

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”

ME 2: Meaning of employment for this subpart, or

“What counts as employment when working out your minimum family tax credit”

Part M Tax credits paid in cash
Minimum family tax credit

ME 1Minimum family tax credit

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).
The formula is—
$(prescribed amount − net family scheme income) × weekly periods ÷ 52.$

Where:
In the formula,—
prescribed amount is $35,316:
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—
1. the person; or
2. their spouse, civil union partner, or de facto partner; or
3. the person and their spouse, civil union partner, or de facto partner:
weekly periods is the number of periods of 1 week in the entitlement period for which the person is a full-time earner.

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

Compare

2004 No 35 s KD 3(2)–(5)

Notes

Section ME 1 heading: substituted, on 1 April 2008, by section 480(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section ME 1(1): amended, on 1 April 2008, by section 480(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section ME 1(2) formula: substituted (with effect on 1 April 2008), on 21 December 2010 (applying for the 2008–09 and later income years), by section 113(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section ME 1(3)(a): amended, on 31 July 2024, by section 28 of the Taxation (Budget Measures) Act 2024 (2024 No 19).
Section ME 1(3)(b): amended, on 1 April 2008, by section 480(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section ME 1 list of defined terms family tax credit: repealed, on 1 April 2008, by section 480(4)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section ME 1 list of defined terms minimum family tax credit: inserted, on 1 April 2008, by section 480(4)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).