Tax-credits-on-donations

Don’t forget to claim tax credits on your donations

One that a number of us do as we go about or lives is occasionally give a helping hand to people in need. This may come in the form of manpower or it may be a monetary contribution to aid a specific cause.

One person gives freely, yet gains even more; another withholds unduly, but comes to poverty. – Proverbs 11:24


Being a Christian, one thing that I do on a regular basis is tithe. Admittedly so, it may not be at 10% but a certain percentage of what I earn does go towards the Kingdom.

If it’s a monetary contribution that you make towards an organistion such as a church or non profit such as UNICEF to help devastated populations such as Vanuatu in the the aftermath of Cyclone Pam, you can claim a tax credit on your donations.

Charitable organisations such as the couple mentioned above operate in such a way that they receive tax exemptions and how exactly that works for them, I am not 100% sure of. However, one thing that I am sure of as someone who makes donations of $5 or more to such organisations is the entitlement to a tax credit. At present as per Inland Revenue’s (IRD) website, you can claim the lesser of:

  • 33.3333% of the total donations you’ve made, or
  • 33.3333% of your taxable income.

How to claim a tax credit

The process of claiming a tax credit is pretty simple and straight forward. The first and most important thing that you need is a receipt from the donee organisation (that meets Inland Revenue’s minimum requirements) and a completed Tax credit claim form (IR526) where you will need to provide basic information such as your IRD number and bank account details.

In a number of instances, the more established donee organisations will provide you with a receipt in April to cover all donations made in the previous financial year. If you are making a one off donation and would like a receipt there and then, there is no harm in asking for it.

For more information on donations tax credit claims and to download the form, visit: https://www.ird.govt.nz/income-tax-individual/tax-credits/

Bonus: Did you know that voluntary school fees are tax deductible and you are entitled to claim back 1/3 of those donations?

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One Response to Don’t forget to claim tax credits on your donations

  1. Felix Lee April 29, 2015 at 11:29 am #

    I really appreciate article like this. It’s very informative and I learned something from here. Thanks for sharing.

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