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Income Tax Act 2007

Tax credits paid in cash - Tax credits for KiwiSaver schemes and complying superannuation funds

MK 4: Amount of tax credit

You could also call this:

“How to calculate your KiwiSaver tax credit”

This section explains how to work out the amount of tax credit paid to a fund provider for a year. The tax credit is equal to half of your total member credit contributions for all your complying superannuation funds and KiwiSaver schemes. However, there’s a maximum amount of $521.43.

If you only meet the requirements for part of the year, the amount of the tax credit is calculated differently. It will be either half of your total member credit contributions for the year, or a part-year maximum amount, whichever is less.

To figure out the part-year maximum amount, you use a formula: $521.43 multiplied by the number of days you meet the requirements, divided by 365.

When counting the days, you can add together different periods of the year when you meet the requirements. This means you don’t have to meet the requirements for one continuous period.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518607.

Topics:
Money and consumer rights > Taxes
Money and consumer rights > Savings and retirement
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MK 3: Payment of tax credits, or

“How the government pays tax credits to your KiwiSaver or superannuation fund”

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MK 5: Crown contributions for members, or

“Government tax credits for KiwiSaver and complying fund members”

Part M Tax credits paid in cash
Tax credits for KiwiSaver schemes and complying superannuation funds

MK 4Amount of tax credit

  1. This section sets out how to calculate the amount of a tax credit paid to a fund provider under section MK 3(2) for a year described in section MK 1(3).

  2. The amount of the tax credit is an amount equal to half of a person's total member credit contributions for the year for all of their complying superannuation funds and KiwiSaver schemes up to a maximum amount of $521.43.

  3. Despite subsection (2), if the person meets the requirements of section MK 2 for only part of the year, the amount of the tax credit is,—

  4. equal to half of their total member credit contributions for the year, if that amount is equal to or less than the part-year maximum amount calculated under subsection (4); or
    1. equal to the part-year maximum amount calculated under subsection (4), if half of their total member credit contributions for the year is greater than the part-year maximum amount calculated under subsection (4).

      1. The part-year maximum amount referred to in subsection (3) is calculated using the formula—

        $521.43 × days ÷ 365.

        Where:

        • In the formula, days is the number of days in the year in which the person meets the requirements of section MK 2.

        • In subsection (3), a part of the year may include 1 or more periods of the year in which the person meets the relevant requirements and, if there are several periods, for the purposes of the item days in the formula, the days in those periods are added together.

        Compare
        • 2004 No 35 ss KJ 3, OB 1 member credit year
        Notes
        • Section MK 4: substituted, on , by section 129 of the Taxation (KiwiSaver) Act 2007 (2007 No 110).
        • Section MK 4(2): amended, on (applying for calculating a tax credit for the year starting on 1 July 2011 and later years), by section 7(1)(a) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
        • Section MK 4(2): amended, on (applying for calculating a tax credit for the year starting on 1 July 2011 and later years), by section 7(1)(b) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
        • Section MK 4(3)(a): substituted, on (applying for calculating a tax credit for the year starting on 1 July 2011 and later years), by section 7(2) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
        • Section MK 4(3)(b): substituted, on (applying for calculating a tax credit for the year starting on 1 July 2011 and later years), by section 7(2) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
        • Section MK 4(4) formula: amended, on (applying for calculating a tax credit for the year starting on 1 July 2011 and later years), by section 7(3) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).