Income Tax Act 2007

MF 6 Overpayment or underpayment of tax credit
When this section applies

(1)

This section applies for the purposes of sections LA 3 and LA 4 (which relate to the treatment of a person’s total tax credits) when—

(a)

a person has an entitlement to a tax credit under section MD 1 (Abating WFF tax credit) or ME 1 (Minimum family tax credit); and

(b)

the person—

(i)

applies under section MF 1 to have the tax credit paid by instalment; or

(ii)

is paid a tax credit under section 80KN of the Tax Administration Act 1994 by the chief executive of the administering department; and

(c)

the instalments of the estimated tax credit, or the total of those instalments, differs from the tax credit, or total tax credit, to which the person is entitled under the family scheme because the instalment has, or the total instalments have, either been overpaid resulting in an excess or underpaid resulting in a shortfall; and

(d)

the Commissioner—

(i)

gives the person a notice of entitlement for the tax year because an instalment of the estimated tax credit has been paid to the person during the tax year; or

(ii)

finds out, otherwise than by way of a notice of entitlement, that an instalment of the estimated tax credit has been paid to the person for the tax year.

Overpayment

(2)

For an overpayment of the person’s entitlement, an amount equal to the excess is—

(a)

added to the tax payable by the person for the tax year; and

(b)

recoverable by the Commissioner under section 80KLB of the Tax Administration Act 1994 as if it were tax payable by the person for the tax year.

Underpayment

(3)

For an underpayment of the entitlement, an amount equal to the shortfall is used to satisfy the person’s income tax liability, and any balance remaining is treated as tax paid in excess and available for use under section LA 7(2) (Remaining refundable credits: tax credits for social policy and other initiatives).

Treatment when tax credits paid by chief executive to certain persons

(4)

The Commissioner may, in relation to a person referred to in subsection (1)(b)(ii), choose to treat the amount of the tax credit paid to the person for the tax year as equal to the person’s entitlement for the tax year.

Defined in this Act: amount, apply, Commissioner, family scheme, income tax liability, notice of entitlement, pay, tax, tax credit, tax year

Section MF 6: substituted (with effect on 1 April 2008), on 6 October 2009, by section 365(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section MF 6(1)(a): amended, on 1 April 2008, by section 488 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MF 6(1)(b): replaced (with effect on 1 April 2008), on 23 March 2020, by section 166(1) (and see section 166(3) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section MF 6(3): amended, on 1 April 2016, by section 212 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section MF 6(4) heading: inserted (with effect on 1 April 2019), on 23 March 2020, by section 166(2) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section MF 6(4): inserted (with effect on 1 April 2019), on 23 March 2020, by section 166(2) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section MF 6 list of defined terms apply: inserted, on 2 June 2016, by section 74 of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).