Tax credits (formerly known as rebates)
A tax credit is usually calculated at the end of the income year and reduces the total tax you need to pay. This may lead to a refund.
For most people, it's the period from 1 April to 31 March the following year. So the 2010 income year is 1 April 2009 to 31 March 2010.
You need to know about income tax credits and other tax credits you might be able to get.
Income tax credits
These include:
- tax credits for children (formerly child rebate)
- tax credit for income under $9,880
- independent earner tax credit (IETC).
Find out more about these tax credits below.
Tax credits for children (formerly child rebate)
You can get this tax credit if you are earning income and, are at any time during the income year:
You can claim the under 19 tax credit for children if you have turned 18 on or after 1 January in the previous income year.
Note:
You can't get the tax credit for children if:
- you're under 19, and
- studying at a tertiary institution
- your only income was from interest and/or dividends.
Tax credit for yearly income under $9,880
You can get this tax credit if your income was under $9,880 before tax and you:
- worked for 20 hours or more a week as a salary or wage-earner or were self-employed, or
- would have done 20 or more hours of paid work but you got a community wage for sickness or accident compensation payments.
You can't get both the tax credit for children and the income under $9,880 tax credit, but you can get whichever tax credit is larger.
Independent earner tax credit (IETC)
From 1 April 2009 people who are eligible and earning between $24,000 and $48,000 will be entitled to a tax credit of up to $10 a week. Find out more information on IETC.
Give it a go
Work out which tax credit you might get using our personal tax summary calculator.
How to claim an income tax credit
If you use the correct tax code the tax credits will be calculated before tax is deducted from your pay. If you haven’t received the tax credits during the year call us on 0800 227 774 and ask for your tax credit to be included in your personal tax summary (PTS). If you're eligible for both the income under $9,880 tax credit and the tax credits for children, we'll calculate them for you and include the larger amount in your PTS.
Other tax credits
What other tax credits are available?
You may be eligible for a tax credit if you have:
- donated money to a charitable organisation
- paid school fees, or
- paid for a housekeeper or childcare.
How to claim one of these tax credits
You need to fill out a Tax credit claim form (IR526) to claim tax credits for donations, childcare and/or a housekeeper. The claim form is not year-specific - you'll need to write which year you're claiming your tax credit for.
How will this affect you?
Check out Real lives to see John's story - he's still at school and needs to claim a tax credit for his part-time job.
Want to know more?
Donations, childcare and housekeeper tax credits
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