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This article refers to an issue previously raised in the Agents Answers article ‘First time provisional tax liabilities satisfied by tax pooling credits and the early payment discount’ in Agents Answers (Issue No 258, July 2022) and provides an update to this article.

Agents Answers article

As previously advised, when income tax was transferred to our new system we did not allow an early payment discount (EPD) for customers who used tax pooling credits to pay their provisional tax liability. This initially impacted the 2019, 2020 and 2021 income tax years and some late processed 2018 income tax returns.

Income Tax Act amended to allow the use of tax pooling credits to qualify for the early payment discount

It was determined that the Income Tax Act (ITA) did not permit taxpayers to claim the EPD when the provisional tax liability was satisfied by use of tax pooling credits. The ITA has since been amended so that it now allows an EPD to be applied for by eligible taxpayers using tax pooling credits. Initially, this legislative change only applied to the 2020 income tax year onwards.

With the passing of the Taxation (Annual Rates 2022-23, Platform Economy, and Remedial Matters) Act 2023, the ITA has now been amended to include the 2018 and 2019 years.

Message us if you have affected clients

For eligible taxpayers whose 2018 or 2019 income tax returns were received prior to the transfer to our new system, the returns will require manual intervention by us. We have tried to identify those customers who may have needed this manual intervention and have corrected those returns. However, if you have clients who are in this situation, please review the affected returns in myIR. If the EPD has not been granted, please send us a web message in myIR.

Last updated: 21 Jun 2023
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