Working for families - tax credits income net widened
Paul Martin • November 6, 2013
A reminder, you are no longer able to use investment losses such as from rental properties to reduce your income for working for families (WFF) tax credit.
The definition of income now also includes an extra nine types of income:
- Attributable trustee income
- Attributable fringe benefits
- PIE income other than registered superannuation schemes such as Kiwisaver and retirement benefit schemes
- Passive income earned by children (includes interest, dividends and rent). Amounts over $500 per child will be included as family income
- Worldwide income received by a non-resident spouse
- Tax exempt salary or wages under specific international agreements
- Income equalisation deposits made by you, your trust or a company controlled by you or your trust
- Certain pension and annuities - includes 50% of payments from life insurance policies or a superannuation fund (excludes NZ super)
- Other payments received from any sources that are used for your family's day-to-day living expenses (but only if the total amount from those sources is more than $5,000). An example of this might be board received.
In future, when you apply for WFF tax credits, you'll need to let IRD know about amounts from any of the above sources.
For those clients who receive or are entitled to WFF credits, when we prepare your tax return we'll need to request the above information.
This time of year can be hard on small business, including sole traders. Your expenses continue and your cashflow can suffer when your debtors go on holiday.
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