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Income Tax Act 2007

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

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

You could also call this:

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

This section explains how to calculate a tax credit for independent earners between 31 July 2024 and 31 March 2025. You can get this tax credit if you earn at least $24,000 in a year. The most you can get is $520.

To work out your tax credit, you need to use a special formula. This formula takes into account how much you earn and how many days are in the credit period.

If you earn more than $66,000 in a year, your tax credit will be reduced. For every dollar you earn over $66,000, your tax credit will go down by 13 cents.

The formula also considers the number of whole days in the credit period. This means you’ll get a portion of the full year’s credit based on how many days are in this specific period.

If you want to know more about who can get this tax 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=LMS967330.

Topics:
Money and consumer rights > Taxes
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“How much tax credit independent earners can get from April to July 2024”

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

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

  1. This section applies for calculating the amount of a tax credit under section LC 13 for the period starting on 31 July 2024 and finishing on 31 March 2025.

  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 $66,000 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 15: inserted (with effect on 1 April 2024), on , by section 4 of the Taxation (Budget Measures) Act 2024 (2024 No 19).