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Income Tax Act 2007

Tax credits and other credits - Terminating provisions

LZ 14: Research and development tax credits’ refundability: option for 2019–20 income year

You could also call this:

“Option to refund research and development tax credits for the 2019-20 tax year”

You can choose to use this section in your tax return for the 2019-20 income year. If you do, it changes how your research and development tax credit is used.

First, the tax department can refund up to $255,000 of your tax credit. This happens if you meet certain conditions:

  1. You meet the corporate eligibility criteria in section MX 2.
  2. You meet the wage intensity criteria in section MX 3.
  3. You don’t earn exempt income, except for dividend income mentioned in sections CW 9 and CW 10.
  4. You’re not connected to anyone who earns exempt income, except for dividend income mentioned in sections CW 9 and CW 10.

If there’s any tax credit left after this refund, it will be handled according to section LY 8. This section talks about carrying forward remaining research and development tax credits.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS337875.

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Money and consumer rights > Taxes
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LZ 13: Part-year override of section LY 3(2)(b), or

“Special rules for partial-year Callaghan Innovation Growth Grant recipients in 2020-2021”

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MA 1: What this Part does, or

“This part explains the tax credits available to individuals”

Part L Tax credits and other credits
Terminating provisions

LZ 14Research and development tax credits’ refundability: option for 2019–20 income year

  1. This section applies for a person’s 2019–20 income year when a person chooses to apply this section in their return of income for the 2019–20 income year.

  2. Despite section LA 5(4B), (5B), and (5C), a person’s research and development tax credit is used by—

  3. first, the Commissioner refunding the tax credit up to a maximum of $255,000, by treating it as a refundable tax credit and applying section LA 6(2), if the person—
    1. meets the corporate eligibility criteria in section MX 2 (Corporate eligibility criteria); and
      1. meets the wage intensity criteria in section MX 3 (Wage intensity criteria); and
        1. does not derive exempt income, ignoring exempt income under sections CW 9 and CW 10 (which relate to income from dividends); and
          1. is not associated with a person that derives exempt income, ignoring exempt income under sections CW 9 and CW 10:
          2. secondly, applying section LY 8 (Carry forward for remaining research and development tax credits), to the extent to which paragraph (a) does not apply to the tax credit.

            Notes
            • Section LZ 14: inserted (with effect on 1 April 2019), on , by section 16(1) (and see section 16(2) for application) of the COVID-19 Response (Taxation and Social Assistance Urgent Measures) Act 2020 (2020 No 8).