From 1 April 2009 eligible tax payers earning between $24,000 and $44,000 will be entitled to an extra $10 each week. For eligible tax payers earning over $44,000 the independent earner tax credit decreases by 13 cents for every additional dollar earned.

Receiving the Tax Credit

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 sal ary or wage, you will receive the IETC through your pay. If you are self employed, or work as a contractor, you can claim the IETC as a lump sum after the end of the year.   

If you will receive the tax credit through your pay after 1 April 2009 you'll need to choose a new tax code: either ME or MESL (if you have a student loan).You'll need to let your employer know by completing a new Tax code declaration (IR330) form. You can only use this new tax code for your main job or source of income. Updated IR330 forms will be available from the start of March 2009.    If you will receive the tax credit at the end of the year you don't need to do anything yet.

If you're a sal ary or wage earner you'll need to request a Personal Tax Sum mary (if you don't usually receive one). IRD will calculate your tax credit for the first time and include it in your Personal Tax Sum mary calculation. You would receive your personal tax sum mary from July 2010.      If you are self employed or a contractor you can claim the tax credit for the first time on your IR3 return for the year ending 31 March 2010 .

Eligible for part of the Year?

If you receive the above forms of government assistance for part of the year and would otherwise qualify for the tax credit, you will be eligible for the months of the year you don't receive the above forms of government assistance.       For Example-    Jonah received the unemployment benefit from 1 April 2009 to 10 September 2009 . He then got a job working at Shelley's fish market. His total income for the year (including his unemployment benefit) was $24,000. Jonah will be eligible for the IETC from October onwards.

If you become a New Zealand resident during the year and you meet the other eligibility criteria you will be eligible for the tax credit for the full months of the year that they are resident.

Working for Families Tax Credit

If you, or your partner or spouse receives Working for Families Tax Credits (or a similar foreign entitlement) you won't be eligible for the IETC.

Student allowance, ACC, paid Parental Leave, Accommodation Supplement

If you receive a student allowance, ACC payments, paid parental leave or the accommodation supplement you will still be eligible for the independent earner tax credit if you meet the other eligibility criteria.