NZ Tax Credits
Updated for 2026 IRD rates
What are Tax Credits?
Tax credits reduce the amount of tax you need to pay, dollar for dollar. New Zealand offers several tax credits that can lower your tax bill or result in a refund. Unlike deductions (which reduce your taxable income), credits directly reduce the tax you owe.
Donations Tax Credit
If you make donations to approved charities or organisations in New Zealand, you can claim a tax credit of 33.33% of the total amount donated. This means for every $100 you donate, you can claim back $33.33.
- Minimum donation: $5 per donation
- No maximum limit — you can claim for all donations in a tax year
- How to claim: Keep your receipts from the charity and claim through myIR or include in your annual tax return
- Time limit: You must claim within 4 years of the end of the tax year in which you made the donation
Approved charities include most registered charitable organisations in New Zealand. School donations, church offerings, and donations to overseas charities may not qualify — check with IRD.
Independent Earner Tax Credit (IETC)
The Independent Earner Tax Credit provides up to $520 per year ($10 per week) for taxpayers who:
- Earn between $24,000 and $70,000 per year (the full $520 credit applies up to $66,000, phasing out to $70,000)
- Do not receive a main benefit, NZ Superannuation, or a student allowance
- Do not receive Working for Families tax credits
The credit phases out at a rate of 13¢ per dollar for income over $66,000, meaning it fully phases out at $70,000. You don't need to apply — IRD automatically calculates the IETC when you file your tax return or through your employer's PAYE deductions.
Child Support
Child support payments in New Zealand are managed by IRD. While child support is not a tax credit you claim, payments you receive as a custodial parent are generally non-taxable, and payments you make as a liable parent may be deductible in certain circumstances.
For formula-assessed child support, the assessment considers both parents' incomes, the number of nights the child spends with each parent, and the costs of raising children. The child support formula uses a standard cost table updated annually by IRD.
Other Tax Credits and Rebates
Housekeeper Tax Credit
The housekeeper tax credit has been discontinued for most taxpayers. It is now only available to taxpayers who were already receiving it before the scheme was closed to new applicants.
Transitional Tax Credit (Transitional Assistance)
If you've recently moved from a benefit into paid work, you may be eligible for a transitional tax credit. This provides up to $60 per week (after tax) for the first year of employment, and $40 per week for the second year. Check with Work and Income or IRD for eligibility.
Tax Credits for Companies
Companies may be eligible for research and development (R&D) tax credits, which provide 15% of eligible R&D expenditure as a tax credit. The credit is available for eligible R&D activities carried out in New Zealand.
How to Claim Tax Credits
Most tax credits can be claimed through your annual tax return in myIR. For some credits like the donations tax credit, you can also claim them at any time during the year by lodging a separate claim. Keep all receipts and documentation supporting your claim — IRD may request evidence.
The IETC in 2025/26 and Beyond
The independent earner tax credit was widened from 31 July 2024 and the new ranges apply in full from the 2025/26 tax year: you receive the full $10 per week ($520 per year) if your income is between $24,000 and $66,000, then the credit reduces by 13 cents per dollar between $66,001 and $70,000, where it fully phases out. You cannot claim the IETC if you receive Working for Families tax credits, a main benefit, NZ Superannuation, or a student allowance. You do not need to apply — if you use the right tax code (or file a return), IRD calculates it automatically. Note the IETC can be a pleasant surprise at tax time for part-time workers and students earning between $24,000 and $70,000 who had tax deducted.
Donations and Other Credits in Practice
The donations tax credit is worth 33.33% of every dollar you give to an approved charity (a third back on every donation — effectively donating at a discount). Claim via myIR using the receipts or a summary from the charity; the $5 minimum applies per donation, and you must claim within four years of the end of the tax year. Other credits worth knowing: the R&D tax credit (15% of eligible R&D spend for companies), the transitional tax credit for people moving from a benefit into work (up to $60 per week in year one), and the familyBoost childcare payment (25% of eligible childcare costs, up to $975 per year), which IRD pays directly to eligible families — it is not a tax credit on your return but is claimed through myIR. Keep receipts for everything: IRD can ask for evidence.
Related Guides
Deep dive — 2026 update
The Independent Earner Tax Credit in 2026/27
The IETC is worth up to $520 a year and is one of the least-claimed entitlements in the tax system. The bands are exact and unforgiving:
| Taxable income | IETC entitlement |
|---|---|
| Under $24,000 | Nil — the credit starts at $24,000 |
| $24,000 – $66,000 | Full $520 a year ($10 a week) |
| $66,000 – $70,000 | Reduces by 13 cents for every dollar over $66,000 |
| Over $70,000 | Nil |
You must also be a New Zealand resident and not receiving a main benefit, Working for Families tax credits, or a student allowance during the period claimed. Use the ME tax code so your employer applies the credit through PAYE — otherwise you have to claim it at year end, and many people never do.
Donations tax credit, worked
You get 33.33% of the amount you donate to an approved donee organisation, as long as each donation is $5 or more and the total claimed is within your taxable income for the year:
| Donated in the year | Credit at 33.33% | True cost of the gift |
|---|---|---|
| $100 | $33.33 | $66.67 |
| $500 | $166.67 | $333.33 |
| $2,000 | $666.67 | $1,333.33 |
Claim it in myIR under "Donation tax credits" and upload the receipts.
What actually changed from 1 April 2026
- Working for Families: the abatement threshold rose from $42,700 to $44,900 and the abatement rate from 27% to 27.5%. Family tax credit amounts rose in line with the Annual General Adjustment at $7,921 for the eldest child.
- Benefits and NZ Super: increased on 1 April 2026 through the Annual General Adjustment — for example Jobseeker Support (single 25+) rose to $372.55 a week net.
- KiwiSaver: the default employee and employer contribution rate rose from 3% to 3.5%.
- IETC: unchanged — still $520 with the $24,000–$66,000 band.
Credits that no longer exist
The housekeeper tax credit and the transitional tax credit appear in older guides but are closed to new claims — a common source of misinformation during tax season.