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COVID-19 - Level 2 If you have been affected by COVID-19, we may be able to help. Find out more

What
Information wage and leave subsidies, provisional tax and the loss carry-back scheme.
Who
For self-employed customers - including in-home childcare providers.

We understand that the COVID-19 outbreak has created a lot of uncertainty for customers. Many customers will have a sudden reduction of income and may be in receipt of a leave subsidy. We want to help customers understand the tax implications of these changes.

Wage and leave subsidies

Self-employed customers may be eligible for a wage subsidy paid by the Ministry of Social Development (MSD) if they have been affected by COVID-19. Leave payments for self-isolation as a result of COVID-19 are also available to self-employed workers who satisfy the eligibility criteria and are prevented from working.

COVID-19 Leave subsidies

COVID-19 Wage subsidies

Home-based childcare providers

A childcare provider who derives gross income from providing childcare services may meet the criteria to use the standard cost in Determination DET 09/02. If a childcare provider elects to use the standard cost in the Determination, and they receive a wage subsidy, then the IR413 can be used to calculate the net income under the standard cost method.

Reduced self-employed income

We understand that the COVID-19 outbreak will mean a sudden reduction of income for many customers. You can apply for a tailored tax code if your income has been significantly affected so that your current withholding rate will be too high for your reduced annual income.

Also, some self-employed customers can apply for a certificate of exemption. Certificates of exemption can only be used for schedular payments. They cannot be used for salary or wages.

Apply for a tailored tax rate for schedular payments

Certificates of exemption for schedular payments

Provisional tax

The provisional tax threshold has been increased from $2,500 to $5,000. This means any current provisional taxpayers with provisional tax payments of less than $5,000 will have until 7 February following the year they file to pay their tax bill. This is intended to lower compliance costs for smaller taxpayers and allow them to retain cash for longer.

COVID-19 Provisional tax

Loss carry-back scheme

You will be able to elect into the loss carry-back scheme if you're expecting to make a loss in the 2019/20 or the 2020/21 year.

Tax loss carry-back scheme