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Income Tax Act 2007

Tax credits and other credits - Tax credits for payments, deductions, and family payments

LB 7: Tax credits related to personal service rehabilitation payments: providers

You could also call this:

“Tax credits for providers of personal rehabilitation services paid by ACC”

You can get a tax credit when someone is paid for personal service rehabilitation. This happens in two ways:

  1. If you get a payment from ACC for personal service rehabilitation and you pay someone else to provide that service to you.

  2. If ACC pays someone directly to provide personal service rehabilitation to you.

The person who provides the service (called the provider) usually gets the tax credit. But if you get paid back for money you spent on the service, you get the tax credit instead.

The amount of the tax credit is worked out using a special formula. It takes into account how much was paid and the tax rate that applies to personal service rehabilitation payments.

This rule also applies to payments you get later to pay you back for personal service rehabilitation you’ve already paid for.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1777050.

Topics:
Money and consumer rights > Taxes
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LB 8: Tax credits related to personal service rehabilitation payments: payers, or

“Tax credits for people who pay others to provide ACC-funded rehabilitation services”

Part L Tax credits and other credits
Tax credits for payments, deductions, and family payments

LB 7Tax credits related to personal service rehabilitation payments: providers

  1. This section applies when—

  2. a person—
    1. is paid under the Accident Compensation Act 2001 a personal service rehabilitation payment for a period for a key aspect of social rehabilitation referred to in the definition of personal service rehabilitation payment; and
      1. pays another person (a provider) for providing the key aspect to them for the period; or
      2. the Accident Compensation Corporation pays a provider a personal service rehabilitation payment for a period for providing a key aspect of social rehabilitation to the person.

        1. For the tax year corresponding to the income year in which the payment falls,—

        2. the provider has a tax credit if the payment is not a reimbursement payment referred to in subsection (5):
          1. the recipient of the payment has a tax credit if the payment is a reimbursement payment referred to in subsection (5).

            1. The amount of the tax credit is calculated using the formula—

              amount paid × tax rate ÷ (1 − tax rate).

              Where:

              • In the formula,—

              • amount paid is the amount paid to the provider for providing a key aspect of social rehabilitation to the person for the period, to the extent to which the amount is equal to or less than the amount of the personal service rehabilitation payment for the period after taking into account any amount of tax withheld:
                1. tax rate is the rate of tax applying to the personal service rehabilitation payment under section RD 10B (Amounts of tax for schedular payments).

                  1. For the purposes of this section and section LB 8, the payment of a personal service rehabilitation payment for a period includes a payment made under the Accident Compensation Act 2001 that is received as a reimbursement payment in a later period.

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                  Notes
                  • Section LB 7: added, on , by section 438(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                  • Section LB 7(1)(a)(i): amended, on , by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                  • Section LB 7(2): replaced (with effect on 1 April 2018), on , by section 68 of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019 (2019 No 33).
                  • Section LB 7(4)(b): replaced, on , by section 82 of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
                  • Section LB 7(5) heading: inserted (with effect on 1 April 2018), on , by section 228(1) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                  • Section LB 7(5): inserted (with effect on 1 April 2018), on , by section 228(1) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                  • Section LB 7 list of defined terms reimbursement payment: inserted (with effect on 1 April 2018), on , by section 228(2) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).