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Income Tax Act 2007

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

LB 8: Tax credits related to personal service rehabilitation payments: payers

You could also call this:

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

You can get a tax credit if you receive a personal service rehabilitation payment under the Accident Compensation Act 2001. This applies when you pay someone else to provide the rehabilitation service for you.

To be eligible for this tax credit, the amount you pay the service provider must be less than the amount you received for rehabilitation, after tax is taken out.

The tax credit is for the tax year that matches the income year when you received the payment. The amount of the credit is worked out using a special formula.

The formula takes into account the total tax withheld from your rehabilitation payment, the amount you paid to the service provider, and the tax rate that applies to your rehabilitation payment.

The tax rate used in the formula is set by another part of the law called section RD 10B.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1777057.

Topics:
Money and consumer rights > Taxes
Health and wellbeing > Healthcare services
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LB 7: Tax credits related to personal service rehabilitation payments: providers, or

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

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LC 1: When net income under low income amount, or

“This old rule about tax credits for low-income earners no longer applies”

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

LB 8Tax credits related to personal service rehabilitation payments: payers

  1. This section applies when—

  2. a person 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. the person pays another person (the provider) for providing the key aspect to them for the period; and
      1. the amount paid to the provider is less than the amount of the personal service rehabilitation payment to the person for the period after taking into account any amount of tax withheld.

        1. The person has a tax credit for the tax year corresponding to the income year in which the period falls to the extent of the amount calculated using the formula—

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

          Where:

          • In the formula,—

          • total tax withheld is the total amount of tax withheld from the personal service rehabilitation payment paid to the person for the period:
            1. amount paid is the amount paid to the provider:
              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).

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                Notes
                • Section LB 8: added, on , by section 438(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                • Section LB 8(1)(a): amended, on , by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                • Section LB 8(3)(c): replaced, on , by section 83 of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).