Independent Earner Tax Credit
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Articles by John Rowe
On 1 April 2009 the Government introduced a new tax credit - the independent earner tax credit or IETC.
The IETC will, from 1 April 2009, deliver $10 per week to individuals who earn between $24,000 and $44,000 and who do not receive a benefit, Working for Families tax credits or New Zealand superannuation.
The IETC will be abated at 13 cents for every dollar of income earned over $44,000. The amount of the IETC will increase to $15 per week from 1 April 2010.
If you're eligible, you can choose to receive the IETC through your pay or as a lump sum at the end of the year. If you work for a salary or wage, you can receive the IETC through your pay.
What To Do
To do this you'll need to choose a new tax code: either ME or ME SL (if you have a student loan).You'll need to let your employer know by completing a new Tax code declaration form. You can only use this new tax code for your main job or source of income.
If you do not notify your employer of a new tax code you'll need to request a personal tax summary at year end and IRD will calculate your entitlement. However, you would then have to wait until at least July 2010, at the earliest, to get your money.
If this sounds a bit confusing, you can contact us for assistance and advice on completing your Tax Code Declaration Form from the IRD.
John Rowe
Director
Business Accounting Services
© Gilligan Rowe & Associates LP
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Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.
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