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Income Tax Act 2007

Tax credits and other credits - Tax credits for natural persons - Tax credits for independent earners

LC 14: Amount of tax credit for independent earners for 1 April 2024 to 30 July 2024

You could also call this:

“How much tax credit independent earners can get from April to July 2024”

You can get a tax credit if you’re an independent earner. This credit applies from 1 April 2024 to 30 July 2024. To figure out how much you get, you need to use a special calculation.

If you earn $24,000 or more in a year, you start with $520. But if you earn more than $44,000, you lose 13 cents for every dollar above $44,000. This is called abatement.

The amount you actually get depends on how many days are in the credit period. You take your starting amount (after any abatement), multiply it by the number of days in the credit period, and divide by 365.

For example, if you earn $30,000, you’d start with $520. There are 121 days between 1 April and 30 July. So you’d calculate: $520 × 121 ÷ 365 = $172.38.

Remember, if you earn less than $24,000 in a year, you don’t get this tax credit at all.

To find out more about who can get this credit, you can look at section LC 13.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS967327.

Topics:
Money and consumer rights > Taxes
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LC 13: Tax credits for independent earners, or

“Tax credit for eligible earners not receiving other benefits or credits”

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LC 15: Amount of tax credit for independent earners for 31 July 2024 to 31 March 2025, or

“Tax credit calculation for independent earners from 31 July 2024 to 31 March 2025”

Part L Tax credits and other credits
Tax credits for natural persons: Tax credits for independent earners

LC 14Amount of tax credit for independent earners for 1 April 2024 to 30 July 2024

  1. This section applies for calculating the amount of a tax credit under section LC 13 for the period starting on 1 April 2024 and finishing on 30 July 2024.

  2. The tax credit for a person under section LC 13 is calculated using the formula—

    (person’s credit − full year abatement) × credit period days ÷ 365.

    Where:

    • The items in the formula are defined in subsections (4) to (6).

    • Person’s credit is, if the person’s net income for the tax year is equal to or more than $24,000, $520. Otherwise it is zero.

    • Full year abatement is, if the person’s net income is greater than $44,000 for the tax year, 13 cents for each complete dollar of the excess.

    • Credit period days is the number of whole days in the credit period.

    Notes
    • Section LC 14: inserted (with effect on 1 April 2024), on , by section 4 of the Taxation (Budget Measures) Act 2024 (2024 No 19).