School of WooHoo - Chapter 6: Tax Codes and Credits - Activity 1

Welcome to Chapter 6: Tax Codes and Credits - Activity 1

After completing this chapter, you will be show an understanding of tax credits and codes and be able to assess in Alpha. You will be able to assist and solve any tax code and credits queries that a customer may have.

If you get an answer incorrect, it will tell you the correct answer and on occasion, a further explanation. Please do not attempt the question again, just move on to the next question.

Use your resources such as Woogle wisely and ensure you fully read the question before answering.

Good luck!

Chapter 6: Tax Codes and Credits

1. For each of the tax codes below, choose the circle to show if it is used for the main source of income, or a second source of income

2. Jo works full-time at a bakery and earns $32,000 per year. She learnt her trade at the local polytechnic, and took out a student loan to help pay for her studies. Jo lives at home with her mother, is single, and has no children.

3. Which one of the following is not an eligibility requirement for the IETC.

  • NZ Tax Resident
  • Annual income between 24,000 to $48,000
  • Not receiving FAM
  • Partner does not receive FAM
  • Does not have a secondary source of income
  • Not receiving an income tested benefit, pension etc

4. Jane has been receiving the Independent Earner tax credit (IETC) and her employer has just given her a pay rise to start the new financial year, from $40,000 to $50,000. What impact would this have on her entitlement to the IETC?

  • Her income would increase, meaning her IETC would increase also.
  • Because of the increase in her income, her IETC would reduce slightly each week.
  • The increase in her pay would take her income over the IETC maximum income bracket for the current tax year so she would no longer be eligible.

5. Choose the correct answer:

I only have one job, what should my tax code be?  

My second job means that my income is $12,000 total, what should my secondary tax code be?  

 

6.IETC entitlement is based on whole months, so if any of the situations above apply for part of a month, the IETC entitlement will stop for that whole month. Alpha will automatically calculate the entitlement however where can you amend the months?

Click on the correct spot on the image below to submit your answer

7. Fill in the Blanks

A customer can claim back up to  of all school donations, church tithes/donations or donations to qualified organisations provided they have earned income in that tax year. 

Once we have received the official receipt from the customer, please attach the receipts in the customer’s Alpha file and add the tag so that we can file the tax claim on behalf of the customer. 

Once received we will file the donation rebate claim (IR526) within 1 week of receiving it, the IRD will then take up to to pay out the refund.

 

8. Match the donation type with their relevant explanation

  • School Donations
    Qualify if they are for state and state integrated schools, or their board of trustees. (The payments can either be "donations" or payment of "school fees" if they go to the school's general fund).
  • Donations to Religious Organisations
    Do not need to be listed on the registered donee organisation list (although many are).
  • Donations to Qualified Organisations
    You can search at "Donee Organisations" to see if the charity is a registered donee organisation.
  • Payroll Giving
    Customers have an option of donating directly through their payroll and receive the donations rebate immediately. If a customer has selected this option, they cannot file an IR526 as they have already been receiving the rebate on each pay cycle.