Working for Families Tax Credit (WFTC)
- Your total family income and where it comes from
- The age and how many financially dependant children you have aged 18 or younger
- Any children you share care of (122 days or 5 days a fortnight)
Family Tax Credit
Paid to families with children 18 years or younger, this tax credit is the one most families qualify for.
- for any child(ren) you receive a foster care allowance, orphan's benefit or unsupported child's benefit, or
- if you receive a parent's allowance.
In-work Tax Credit
- an income-tested benefit
- a student allowance
- a parent's allowance, or
- children's pension.
Minimum Family Tax Credit
- an income-tested benefit, or
- a parent's allowance
Parental Tax Credit
Paid to families with a newborn baby for the first 70 days (ten weeks) after the baby is born & the maximum payment is $2,200 depending on family income.For this option you must register within 3 months of child’s birth date.
- paid parental leave
- an income-tested benefit, even if it is suspended
- NZ Super
- a veteran's pension
- a student allowance, or
- accident compensation from ACC, unless you get this for less than three months.
Working for Families - Income to be added back from 1 April 2011
Attributable trustee income
Attributable trustee income is all income for the year of a trust that hasn't been distributed as beneficiary income. It includes income from trading and investment activities and the net income of any company controlled by the trust. Trustee income will be attributed only to settlors of a trust. The settlors are individuals who establish or contribute funds to the trust.
Family scheme income for the income year is calculated by (trustee income + companies income) / number of settlors.
Attributable fringe benefits
The value of any attributable fringe benefits is required to be declared by all shareholder employees if they, or their associates, hold voting interests of 50% or more in a company. The value of the fringe benefit is the tax-inclusive value of the benefit,
This includes an amount of income attributed by a portfolio investment entity (PIE) to the principal caregiver or their spouse or partner, except if the PIE is a superannuation fund or a retirement savings scheme (eg KiwiSaver).
Passive income of children
If your child(ren) receive(s) any of the following types of income totalling over $500 a year (per child), you’ll need to include the amount over $500 (per child) as part of your family income:
- resident passive income. This includes interest, dividends, a taxable M?ori Authority distribution
- beneficiary income. However, beneficiary income that is excluded under the minor beneficiary rule is not included in family income (eg, income from a testamentary trust).
- distributions from a listed PIE
- attributed income from a PIE that is not a superannuation fund or
- retirement savings scheme.
Income of non-resident spouse
Tax exempt salary or wages
Pensions and Annuities
- replacing lost or reduced income (eg; payments from an insurance policy that covers loss of earnings/employment)
- used to pay regular liabilities (for example, car payments, hire purchases, mortgage, loans)
- used to meet the family’s usual living expenses (eg; monthly phone bill or power bill)
- paid directly by another person on behalf of the principal caregiver, or their family members, for regular expenses (eg; paying the power, phone, gas bills directly).
- Payments can include soft loans. A soft loan is a loan made available to a person on favourable terms, such as no or little interest payable and no set repayment date.
Income equalisation scheme deposits (excludes "adverse events" deposits)
This includes any deposits made by:
- a company controlled by you or your trust, or
- your trust
- to an agricultural, fishing or forestry business income equalisation scheme account at Inland Revenue.
- subsequent refunds from these accounts (excluding interest) shouldn't be included as income for WFTC
If you require assistance or think you might be eligible for working for families tax credits please contact us to discuss.
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