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LD 5: Calculating amount of tax credit and filing particulars
or “How your employer calculates and reports your payroll donation tax credit”
You could also call this:

“What happens if your payroll donation goes to an unapproved organisation”

This law applies when your employer or PAYE intermediary sends your payroll donation to an organisation that isn’t approved to receive donations. If this happens, you won’t get a tax credit for your donation.

If your tax credit is cancelled, two things will happen:

The amount of the credit will be taken away from your PAYE income payment tax credits for that tax year.

If removing the credit means you haven’t paid enough tax for a PAYE income payment, you’ll need to pay the missing amount to the Commissioner.

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Next up: LD 7: When donation returned to person

or “What happens when a payroll donation is returned to you”
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Part L Tax credits and other credits
Tax credits for gifts and donations

LD 6When donation is paid to ineligible recipient

  1. This section applies for the purposes of section LD 4 when the employer or PAYE intermediary transfers the person's payroll donation to an entity that is not a donee organisation.

  2. The tax credit is extinguished.

  3. The consequences that arise when a tax credit is extinguished under subsection (2) are—

  4. the amount of the credit is removed from the person's tax credits for PAYE income payments under section LB 1 (Tax credits for PAYE income payments) for the tax year in which the pay period falls:
    1. when the extinguishing of the credit results in a shortfall in an amount of tax for a PAYE income payment, section RD 4 (Payment of amounts of tax to Commissioner) applies to the shortfall.

      Notes
      • Section LD 6: added, on , by section 323 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
      • Section LD 6(3)(a): amended, on , by section 75 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
      • Section LD 6 list of defined terms PAYE intermediary: inserted (with effect on 6 January 2010), on , by section 158 of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).