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Tax credits for people made redundant
MEDIA RELEASE
2 April 2008
Tax credits for
people made redundant
A simpler, fairer system of tax on redundancy payments takes effect this week.
People who receive redundancy payments will be entitled to claim a tax credit of six cents in the dollar up to a maximum of $3,600. Anyone who has been made redundant since 1 December 2006 is eligible to claim from 1 April 2008.
Group Manager Assistance David Udy said the tax credit benefits anyone who has been made redundant.
‘’In some cases, people have been pushed into a higher tax bracket by the lump sum redundancy payment.
“These payments have incurred a higher rate of tax, without taking into consideration the recipient's personal tax rates before and after redundancy,’’ said Mr Udy.
“This change makes the taxation fairer.’’
This rebate is standalone, and not related to any other payments or end-of-year square-ups, Mr Udy said. ‘’People can claim at any time during the year.’’
To claim the tax credit, customers will need to complete the claim form (IR524), and provide documentation that clearly shows the amount of the redundancy payment received. This could include a letter from their employer, a payslip or a calculation sheet provided by the employer.
More information, including the
application form, is available at
http://www.ird.govt.nz/yoursituation-ind/retirement/redundancy-tax-credit/
The form can also be requested by calling 0800 257 773.
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