Income Tax Act 2007

MK 4 Amount of tax credit
What this section does

(1)

This section sets out how to calculate the amount of a tax credit paid to a fund provider under section MK 3(2) for a year described in section MK 1(3).

Amount of credit for year

(2)

The amount of the tax credit is an amount equal to half of a person’s total member credit contributions for the year for all of their complying superannuation funds and KiwiSaver schemes up to a maximum amount of $521.43.

Part-year equivalents: amount of tax credit

(3)

Despite subsection (2), if the person meets the requirements of section MK 2 for only part of the year, the amount of the tax credit is,—

(a)

equal to half of their total member credit contributions for the year, if that amount is equal to or less than the part-year maximum amount calculated under subsection (4); or

(b)

equal to the part-year maximum amount calculated under subsection (4), if half of their total member credit contributions for the year is greater than the part-year maximum amount calculated under subsection (4).

Part-year equivalents: maximum amount

(4)

The part-year maximum amount referred to in subsection (3) is calculated using the formula—

$521.43 × days ÷ 365.

Definition of item in formula

(5)

In the formula, days is the number of days in the year in which the person meets the requirements of section MK 2.

Parts of years

(6)

In subsection (3), a part of the year may include 1 or more periods of the year in which the person meets the relevant requirements and, if there are several periods, for the purposes of the item days in the formula, the days in those periods are added together.

Defined in this Act: amount, employee, employer contribution, first payment period, fund provider, member credit contribution, salary or wages, second payment period, tax credit

Compare: 2004 No 35 ss KJ 3, OB 1 “member credit year”

Section MK 4: substituted, on 1 April 2008, by section 129 of the Taxation (KiwiSaver) Act 2007 (2007 No 110).

Section MK 4(2): amended, on 1 July 2011 (applying for calculating a tax credit for the year starting on 1 July 2011 and later years), by section 7(1)(a) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).

Section MK 4(2): amended, on 1 July 2011 (applying for calculating a tax credit for the year starting on 1 July 2011 and later years), by section 7(1)(b) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).

Section MK 4(3)(a): substituted, on 1 July 2011 (applying for calculating a tax credit for the year starting on 1 July 2011 and later years), by section 7(2) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).

Section MK 4(3)(b): substituted, on 1 July 2011 (applying for calculating a tax credit for the year starting on 1 July 2011 and later years), by section 7(2) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).

Section MK 4(4) formula: amended, on 1 July 2011 (applying for calculating a tax credit for the year starting on 1 July 2011 and later years), by section 7(3) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).