$68m left on the table by taxpayers owed credit

Finance Minister Steven Joyce said few people were claiming the IETC.
HAGEN HOPKINS/GETTY IMAGES

Finance Minister Steven Joyce said few people were claiming the IETC.

Thousands of New Zealanders have passed up their chance to claim a slice of $68 million.

As part of this year's Budget, it was revealed that the Independent Earner Tax Credit will be discontinued.

This credit had been available to people earning between $24,000 and $48,000 who did not receive Working for Families or any benefit. It was worth up to $520 a year.

But, revealing the change, Finance Minister Steven Joyce said the credit had not been claimed by as many people as had been expected.

READ MORE: 
Budget 2017: Family income and tax package - by the numbers
* Budget 2017: Tax and housing assistance to boost family incomes
* Govt's income package leaves 200 families with one child worse off

Only 32 per cent of those who were eligible for the credit had received it in the year they were eligible. The increase in the $14,000 tax threshold would offset the removal of the credit, he said.

Inland Revenue confirmed that 131,000 people who were eligible for the credit did not claim it in the 12 months to March 31, 2016. . "We estimated the cost if it had been claimed at $68 million."

People who has a ME or MESL tax code would automatically have the credit calculated in their pay but other people needed to file an income tax return to receive it.

Gabrielle Purchas, managing director at WooHoo, said the amount owing to people could be quite significant. Taxpayers can claim for the past five years, so some people could claim more than $2500.

But she said many were not aware that it was available.

Ad Feedback

Those who file tax returns now will be able to claim their credit for each of the past five years. But once it is removed in the 2018 tax year, they will only be able to claim for four years of historical credits, and the number of years will decline each year from then on.

She said anyone who was not on the right tax code and had not filed a return recently should check whether they were eligible. You can do this with an accountant, tax refund site or directly through the IRD website.

She said, even in her own organisation, there were people who did not realise they could claim it.

"Staff we bring on every year can't believe that they could have a couple of grand waiting."

 - Stuff

Comments

Ad Feedback
special offers
Ad Feedback