Do you file an IR3 tax return? If yes, you must be aware of the new procedure for claiming your tax credits.
The procedure involves credit claims for donations, childcare and housekeeper payments. To avoid delays, we suggest you file your tax credit claim and IR3 at the same time.
The total donations, childcare and housekeeper payments claimed in a tax year cannot be more than your taxable income for that year. We therefore use your IR3 to check the taxable income before sending you refund, if applicable.
If you claim tax credits, but do not file an IR3, there will not be any changes.
Your claim form will be sent in April and processed within six weeks.
If you file an IR3 and made a tax credit claim for last year, you will receive your Tax credit claim form (IR526) in May, instead of April.
Receipts for all donations, childcare and housekeeper payments should be provided with the claim. Donation receipts should have (a) the name of the person or the name of his or spouse or partner (b) the amount and date (c) a statement that it is a donation (d) signature of the authorised person and (e) an official stamp with the name of the organisation that received the donation.
Please visit our website for more information, including donations, childcare and housekeeper payments that qualify for the tax credits.
Remember that you cannot file IR526 if you or your employees are making donations through payroll.
The tax credit is provided at the time through the PAYE system.
We have amended the criteria for receipts for earthquake relief donations.
Donations, particularly through third parties, going to organisations that support the Christchurch Earthquake Relief effort have fewer receipt requirements.
Receipts for these donations must (a) show the amount and date of the donation (b) include a statement showing Christchurch Earthquake donation (or similar) and (c) be on the letterhead of the organisation issuing it.
Abdul Rafik is Inland Revenue’s Community Relationships Advisor based in Auckland. He will answer queries sent to venkat@indiannewslink.co.nz
Please see related story in this section on Readers’ queries.
Free taxation seminars and workshops are held regularly throughout the country for businesspersons. Please visit our website www.ird.govt.nz to register for a seminar or workshop near you.
