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New Zealand law explained for everyone

Income Tax Act 2007

Tax credits paid in cash - Payment of credits

MF 4: Requirements for calculating instalment of tax credit

You could also call this:

“How the government calculates your regular tax credit payments”

When you get tax credits paid in cash, the government needs to work out how much to give you each time. This applies to three types of tax credits: the Working for Families tax credit, the Minimum Family tax credit, and the Best Start tax credit.

The person in charge of taxes (called the Commissioner) figures out how much to give you as if the payment period was a time when your family situation stayed the same. They use information about how much money your family makes and the amounts set for different types of tax credits.

Sometimes, the Commissioner might think that the total amount of tax credits you’re getting for the year might be too much or too little compared to what you should get. If this happens, they can change how much you get in your remaining payments. They might give you less if they think you’re getting too much, or more if they think you’re not getting enough.

The amount you get each time will always be in whole dollars, with no cents. You’ll see this amount on a notice that tells you what you’re entitled to get.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518591.

Topics:
Money and consumer rights > Taxes
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MF 3: Calculating amount of interim WFF tax credit, or

“How Inland Revenue estimates your Working for Families tax credit amount”

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MF 4B: Calculation of instalments: 1 April 2008 to 30 September 2008, or

“How to work out tax credit payments for April to September 2008 (no longer in use)”

Part M Tax credits paid in cash
Payment of credits

MF 4Requirements for calculating instalment of tax credit

  1. This section applies for an instalment by way of tax credit under—

  2. section MD 1 (Abating WFF tax credit):
    1. section ME 1 (Minimum family tax credit):
      1. section MG 1 (Best Start tax credit entitlement).

        1. The Commissioner must calculate the amount of the instalment as if the calculation period referred to in section MF 3 were a relationship period.

        2. The Commissioner must calculate the amount of the instalment using—

        3. a value for family scheme income as directed by section MF 3(2)(c); and
          1. the amounts of family tax credit, in-work tax credit, child tax credit, parental tax credit, family credit abatement, minimum family tax credit, Best Start tax credit, and Best Start credit abatement set out in sections MD 3, MD 4, MD 11, MD 12, MD 13, ME 1, MG 2, and MG 3.

            1. Despite subsection (3), when the Commissioner expects that the total of the parts of the instalments paid and still to be paid to a person for a tax year that relate to the person’s estimated tax credit under sections MD 1 and ME 1 for the tax year will differ from the person’s entitlement to a tax credit under sections MD 1 and ME 1 for the tax year if the Commissioner were, for the remaining instalments for the tax year, to pay to the person the part of the amount of the instalment calculated under subsection (3) that relates to amounts of family tax credit, in-work tax credit, child tax credit, parental tax credit, family credit abatement, and minimum family tax credit set out in sections MD 3, MD 4, MD 11, MD 12, MD 13, and ME 1, the Commissioner may—

            2. decrease the amount of the person’s remaining instalments for the tax year to offset all or part of the expected excess; or
              1. increase the amount of the person’s remaining instalments for the tax year to offset all or part of the expected shortfall.

                1. The instalment is to be shown in a notice of entitlement in complete dollars.

                Notes
                • Section MF 4: replaced, on , by section 20 of the Families Package (Income Tax and Benefits) Act 2017 (2017 No 51).
                • Section MF 4(3B) heading: inserted, on , by section 240(1) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                • Section MF 4(3B): inserted, on , by section 240(1) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                • Section MF 4 list of defined terms pay: inserted, on , by section 240(2) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                • Section MF 4 list of defined terms tax year: inserted, on , by section 240(2) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).