Issue Forty Five, November 2010
DONATION & CHILDCARE REBATES
DID YOU KNOW?
Donations
A refundable tax credit is applicable for gifts of $5 or more made to specified charitable or public organisations by a naturally person (i.e. there is no credit available for absentees, companies, public authorities etc). Donations should not include any perceived benefit to you (examples of which might be Christmas card, meals, artwork, and advertising. The amount of the donation tax credit was limited to the lesser of 33 1/3% of the total gifts or $630 until the end of the 2007/2008 tax year. From the 2008/2009 tax year onwards the donations rebate was changed so that it is calculated as 33 1/3% of the total gifts made in a tax year, limited to the natural person's taxable income for the year.
School Payments
A tax credit can also be claimed for payments for school fees and state run kindergartens, so long as the monies are intended for general fund use. You cannot claim on school payments for specific tuition fees, attendance fees and tertiary education fees. This tax credit would be limited to 33 1/3% of the total payments made, limited to the natural person's annual taxable income. Note that private kindergarten and childcare fees cannot be claimed under donations, but can be claimed under childcare/housekeeper tax credits.
Private Kindergarten and Childcare Payments
If you have made payments for private kindergarten or childcare, you can claim part of it back as a tax credit of your tax return. However, it is important to remember that in order to qualify for this credit, your child must be under 18 or unable to work because of a disability and you must either be a single parent or in a relationship where both you and your partner are working. The tax credit received will be 33% of the total payments you have made, up to a maximum credit of $310.
Did You Know?
The list of charitable or public organisations that qualify for a rebate are regularly updated on the Inland Revenue Department's website (www.ird.govt.nz). If you are uncertain whether a credit may be applicable please send the receipt to HWI Limited for further investigation.
Taxpayers have four years in which to file claims for both charitable gifts tax credits and housekeeper/childcare rebates. if you have made payments which have been accidentally excluded from your rebate claim please contact HWI Limited to enable the preparations an filing or rebate claim forms for prior periods.
Disclaimer Information contained within this document is of a general nature and does not constitute advice. Readers are cautioned not to act or reply on it without first seeking professional advice. The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
