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Articles by John Rowe

Independent Earner Tax Credit

AUTHOR: John Rowe

POSTED: 25 April 2009

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.

Request a Meeting

John Rowe
Director
Business Accounting Services

09 522-7955

jr@gra.co.nz

© 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.

Comments

Testimonials

This letter is to express my appreciation for the assistance and encouragement of both Anthony Lipscombe and particularly John Heaslip over the last financial year. The period since activating my trading trust has been one of considerable stress, as well as personal development, as I embarked on this as a relative business neophyte with virtually no awareness of the contemporary requirements of running a business, particularly the financial records aspect. During much of this period I have therefore felt considerable out of my depth. However I have been lucky enough to have had the benefit of the advice and support of John Heaslip in rationalizing what was a fairly chaotic set of records of the first year property trading. I am able to say that John in particular, has been unstinting in his attention to my needs and has done so in a manner which has never alluded to my extremely rudimentary grasp of managing a business, or even of being unable to set out a spread sheet properly. The result of the above guidance is that now, although my trading trust would still not be able to operate without the advice of GRA, I do least feel a sense of satisfaction that I have got to my present point without major disaster and that my property trust does now have some kind of firmer basis for any future activities - Name withheld by request

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