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When your income tax assessment is automatically calculated, you may end up with tax to pay.

In the situations shown below, we'll write off your tax automatically ‒ unless you file an IR3 income tax return.

IR3 filers are not eligible for a write-off.

Tax to pay of $50 or under

We'll automatically write off your assessed tax to pay if it is $50 or less. This amount had been increased to $200 for the 2020 tax year to help ease the financial stress caused by COVID-19.

Income tested benefit, education grant, New Zealand Superannuation or a veteran's pension

If you have a tax bill of over $50 (or $200 for the 2020 tax year) and you have no more than $200 of other reportable income such as interest or dividends, we'll automatically write off the full amount if your income is from:

We will not write off your assessed tax to pay if your only income is from an income tested benefit, an education grant, New Zealand Superannuation, a veteran’s pension and the following apply:

  • you have a Working for Families entitlement
  • were the primary caregiver at any time during the year
  • were entitled to Working for Families at any time during the year.

Extra pay periods (effective from 2020 tax year onwards)

If your assessed tax to pay is only because you had an extra pay period (for example 27 fortnightly pays rather than 26, or 53 weekly payments instead of 52) during the year, we may write off the full amount. This depends on how much the tax bill is and other factors.

Income up to and including $180,000

A write-off is not possible if your residual income tax is more than:

  • weekly pay - $230
  • fortnightly pays - $380
  • four-weekly pays - $720.

Income including and over $180,001 (from the 2022 tax year)

A write-off is not possible if your residual income tax is more than:

  • weekly pay - $440
  • fortnightly pays - $800
  • four-weekly pays - $1,550.

Tailored tax code and other write-offs

We will not write it off if you used a tailored tax code during the year. We will also not write it off in the following situations.

Your tax code or tax rate was wrong

Situations where we may recommend you use a different tax code for your PAYE, or a higher tax rate for your investment income include if you:

  • used an unsuitable tax code for your PAYE
  • had tax deducted at a rate lower than the correct rate on schedular payments, an extra pay or secondary employment income
  • had tax deducted at a rate lower than the correct rate on investment income that has RWT deducted
  • had annual income over $48,000 and received a Māori authority distribution, income from election day work on an EDW tax code or as a casual agricultural employee on a CAE tax code
  • had untaxed employee share benefit scheme income.

You have a Working for Families entitlement

If you are the primary caregiver and were entitled to Working for Families at any time during the year.

When do we write off your tax?

If you are eligible for one of these write-offs and receive an automatically-issued income tax assessment, the write off will be applied at the time we issue your assessment.

If you are eligible for one of these write-offs and receive a request that more information is required, once this has been confirmed you will receive an income tax assessment that will show if any automatic write off has been applied.

Last updated: 03 Aug 2021
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