Independent earner tax credit (IETC)
According to IRD, you may be eligible for the independent earner tax credit (IETC) if you are a tax resident of New Zealand and your income in a given tax year falls between $24,000 and $70,000.
Your income type matters to see whether you are eligible for this. The IETC on income can be obtained from wages or salaries.
- Salary or wages
- Student Allowance
- Veterans’ weekly compensation payments
- ACC compensation payments
- paid parental leave
- investments
- self-employment
- business that is run through a trust
- other types of business income.
The IETC is not available to you if the Working for Families Tax Credits are available to you and your spouse, you get a Veteran’s Pension, New Zealand Superannuation, income-tested benefit or receive any of the equivalent of any of the aforementioned in another country.
IETC is also calculated on a monthly basis, therefore you will not be eligible for IETC for the entire month if you receive any of the aforementioned payments at any point during that month.
The amount that you can obtain
If, during the tax year, your pre-tax income falls:
- Between $24,000 and $66,000, you receive $10 every week.
- Between $66,001 and $70,000, your entitlement decreases by 13 cents for each dollar you make over $66,000
Any losses from prior years that you may have carried over are not included in your before-tax income.
Can you receive the IETC?
You can either file your tax return or provide your employer with the correct tax code to receive this tax credit, depending on your income sources. The annual maximum you can get is $520.
See ird.govt.nz for more details on the independent earner tax credit (IETC).
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15 October 2024