New Zealand tax residents earning between $24,000 and $48,000 in a tax year qualify for the independent earner tax credit (IETC).
Your type of income counts
You can get the IETC on income from:
- salary or wages
- ACC compensation payments
- paid parental leave
- other types of business income.
You cannot get the IETC if:
- you or your partner are entitled to Working for Families Tax Credits
- you receive an income-tested benefit
- you receive New Zealand Superannuation
- you receive a Veteran’s Pension
- you receive an overseas equivalent of any of the above.
IETC is worked out on whole months. If you receive any of the above payments at any time during a month, you will not be entitled to IETC for that whole month.
Your gross income counts
The IETC is worked out on your gross income. Your gross income is your income before tax is deducted or paid.
If you’re an IR3 filer your gross income is your income after expenses and losses are deducted.
How much you can get
If your gross income in the tax year is between:
- $24,000 and $44,000 – you get $10 per week
- $44,001 and $48,000 – your entitlement reduces by 13 cents for every dollar you earn over $44,000.
How to get the IETC
The way you get the IETC depends on where your income comes from. The following pages explain how you can get it in different situations.