Removal of Tax Credits
Three tax credits have been repealed effective from the 2013 income year. These are:
- tax credits for income under $9,880,
- childcare rebates and
- housekeeper rebates.
Taxpayers will still be able to make claims for the above for the 2012 tax year and previous years.
Student loan voluntary repayment bonus removed
Effective from 1 April 2013, the voluntary repayment bonus for extra student loan repayments will no longer be available. Extra repayments made for the 2013 year (1 April 2012 – 31 March 2013) and earlier tax years may still qualify for the bonus.
Tax Credits for Children
The tax credit for children’s earnings from paid work has been replaced with a limited tax exemption, meaning children will not need to pay tax on up to $2,340 of income not taxed at source (such as money for mowing the neighbors’ lawns). The exemption does not apply to income where tax has already been paid, such as salary, wages, or interest. Also, from 1 April 2013, employers are legally required to use the no-notification rate (of 45 percent) for PAYE when an employee does not return a fully completed IR 330.
Important: This is not advice. Clients should not act solely based on the material contained in the Client Newsletter. Items herein are general comments only and do not constitute or convey advice per se. Changes in legislation may occur quickly. We, therefore, recommend that our formal advice be sought before acting in any of the areas.
