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Income Tax Act 2007

Tax credits paid in cash - Minimum family tax credit

ME 2: Meaning of employment for this subpart

You could also call this:

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

When calculating a minimum family tax credit, employment means an activity that gives you the right to receive a PAYE income payment. However, some payments don’t count as employment for this purpose.

You’re not considered employed if you get payments like those mentioned in section RD 5(3) and (6)(b), (bb), (bc), (bd), and (c), or if you’re a non-resident contractor getting paid for contract work. It also doesn’t count if you get paid by a close company where you’re a major shareholder, or if your spouse, civil union partner, or de facto partner pays you.

Sometimes, you might get a PAYE income payment even if you’re not working or doing less work than usual. In these cases, the Commissioner can decide to treat you as if you were working normally. They’ll look at when you got paid, which pay period it was, why you got paid, and any other important details.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518572.

Topics:
Money and consumer rights > Taxes
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ME 1: Minimum family tax credit, or

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

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ME 3: Meaning of net family scheme income, or

“How to calculate your family's income for tax credits”

Part M Tax credits paid in cash
Minimum family tax credit

ME 2Meaning of employment for this subpart

  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—

  2. 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):
    1. a schedular payment that is a contract payment for a contract activity or service of a non-resident contractor:
      1. a payment made by a close company to a person who is a major shareholder of the close company:
        1. a payment made by a person to their spouse, civil union partner, or de facto partner:
          1. 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.

            1. Subsections (3) and (4) apply when a person—

            2. receives a PAYE income payment; and
              1. on the date of receipt—
                1. does not undertake any employment; or
                  1. performs an activity to an extent less than would give rise to an entitlement to the PAYE income payment.

                  2. 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.

                  3. The Commissioner must have regard to—

                  4. the date of receipt of the PAYE income payment; and
                    1. the pay period in which the PAYE income payment occurs; and
                      1. the circumstances giving rise to the PAYE income payment; and
                        1. any other matters that the Commissioner considers relevant.

                          Compare
                          Notes
                          • Section ME 2(1): amended, on , by section 481(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                          • Section ME 2(1)(a): amended (with effect on 5 January 2010), on , by section 110 of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                          • Section ME 2 list of defined terms family tax credit: repealed, on , by section 481(2)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                          • Section ME 2 list of defined terms full-time earner: inserted (with effect on 1 April 2008), on , by section 362 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                          • Section ME 2 list of defined terms minimum family tax credit: inserted, on , by section 481(2)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).