Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Tax credits paid in cash - FamilyBoost tax credits

MH 4: Meaning of tax credit income

You could also call this:

“What 'tax credit income' means and how it's calculated for tax credits”

When you get a FamilyBoost tax credit under section MH 3, your tax credit income is the amount calculated under certain rules. You work out your tax credit income for a tax credit quarter based on your reportable income or taxable income for that quarter. If you have only reportable income, your tax credit income is the same as your reportable income.

If you have taxable income, your tax credit income is 25% of your taxable income for the income year. The Commissioner can use your most recent tax return to work out your tax credit income if you have not filed a return for the current income year. You must have filed your return on time under section 37 of the Tax Administration Act 1994 to do this.

If you have both reportable income and other income, the Commissioner works out your tax credit income based on your most recent return. Your tax credit income is the greater of the amount based on your reportable income or the amount based on your other income. However, if you have not had to file a tax return in the last two years and have not had reportable income, your tax credit income is zero.

If you have a relationship partner, your tax credit income is the combined total of your tax credit income and your partner’s tax credit income. The Commissioner works out your partner’s tax credit income using the same rules that apply to you. But if you are separated from your partner at the end of the tax credit quarter, you do not combine your incomes.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS976043.

Previous

MH 3: FamilyBoost tax credit, or

"Help with childcare costs: get back some of the fees you pay for your kids"

Next

MH 5: FamilyBoost tax credit abatement, or

"How much FamilyBoost tax credit you get if you earn over $35,000"

Part M Tax credits paid in cash
FamilyBoost tax credits

MH 4Meaning of tax credit income

  1. The tax credit income of a person entitled to a FamilyBoost tax credit under section MH 3 is the amount determined under subsections (2) to (8).

  2. When the person has only reportable income in a tax credit quarter, the person’s tax credit income for the tax credit quarter is the same amount as their reportable income for that quarter.

  3. Subject to subsection (5), the person’s tax credit income for a tax credit quarter is 25% of the person’s taxable income for an income year when—

  4. the person has filed a return of income for that income year; and
    1. that income year includes the tax credit quarter; and
      1. the person has only other income for that income year.

        1. If the person has not yet filed a return of income for an income year that includes a tax credit quarter, the Commissioner may determine the person’s tax credit income based on the person’s most recent return. Subject to subsection (5), the person’s tax credit income for that quarter is 25% of the person’s taxable income for an income year when—

        2. the most recent return has been filed in either of the 2 income years preceding the tax credit quarter; and
          1. the person has complied with the due dates for filing under section 37 of the Tax Administration Act 1994 or is treated as doing so under section MH 3(5).

            1. If the person has both reportable income and other income during an income year, the Commissioner may determine the person’s tax credit income based on the person’s most recent return of income. The person’s tax credit income for the tax credit quarter is the greater of—

            2. the amount under subsection (2), calculated as if the person has only reportable income for that income year; and
              1. the amount under subsection (3) or (4), calculated as if the person has only other income for that income year.

                1. Despite subsections (2), (3), (4), and (5), a person’s tax credit income is zero if, throughout the 2-year period preceding the income year that includes the person’s tax credit quarter, the person has not had an obligation to file a return of income by the dates required under section 37 of the Tax Administration Act 1994 and has not derived reportable income for the tax credit quarter.

                2. If the person has a spouse, civil union partner, or de facto partner (relationship partner) for the tax credit quarter, the person’s tax credit income for the tax credit quarter is the combined total of the person’s tax credit income and the tax credit income of their relationship partner for that quarter. For these purposes, their relationship partner’s tax credit income is determined under subsections (2) to (6) as if their relationship partner were the person referred to in those subsections.

                3. Subsection (7) does not apply for a tax credit quarter if the person is separated from their relationship partner and does not have a relationship partner at the end of that quarter.

                Notes
                • Section MH 4: replaced (with effect on 1 July 2024), on , by section 112 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).