If you're an ACC carer, you have tax responsibilities you need to meet to avoid penalties.
You pay tax on your earnings if you're paid for any of these duties as an ACC carer:
- attendant care
- home help
- attendant care services - training for independence
- attendant care services - transport for independence.
What you need to do depends on who pays you - ACC or the person you're caring for.
If your agency pays you, you are not an ACC carer so the ACC carer rules do not apply to you. Instead, the tax rules for employees apply to you because you're an employee of your agency.
When you become a carer for someone
You need to fill in 2 forms to make sure you're paid and taxed at the right rate.
Your payer will give you a How would you like us to pay for your care? - ACC84 form. You need to complete this form for each client you provide care for. Your client also needs to complete some of this form.
You also need to complete a Tax rate notification for contractors - IR330C form.
You need to return both forms to your payer, either ACC or the person you're caring for.
If you do not return both forms, your payer cannot pay you and will tax you at a higher rate.
Choose your tax rate
As an ACC carer you get schedular payments. These are usually taxed at the rate of 10.5%. You may be able to choose a different tax rate when you complete your IR330C.
Your payer takes the tax out of each payment at the rate you give them. They pay it to us before they pay you.
Keep records during the year
If the person you're caring for pays you, you need to keep full and accurate records for 7 years of:
- the date you were paid
- how much you were paid
- the name of the person who paid you.
You do not need to keep records if ACC pays you.
Keep records of expenses
If you're self employed, you can claim vehicle expenses and ACC levies as expenses.
If you use your vehicle while performing your care duties, you can claim expenses for this. For example, if you take a client to a medical appointment.
You cannot claim for travel from home to a place of work, because this is considered private use, not business use.
You may have to pay ACC levies on the income you earn from being a carer. You can claim these as expenses.
If you're self employed
Most carers do not meet the criteria for being 'in business', so we do not consider them self employed.
Register for goods and services tax (GST) if your income is over $60,000
If you're self employed and your total income from all sources is over $60,000 a year, you must register for GST.
At the end of the tax year
File an IR3 tax return
At the end of the year:
- if the person you're caring for paid you, you'll have to use your own records of income to complete your tax return
- if ACC paid you, we'll send you a summary of earnings, showing the amount ACC paid you, and the tax they paid us on your behalf.