The amount paid for tax credits under the Working for Families rules increased reasonably substantially last year (2018) and are now more generous than ever. The current income thresholds within which Working for Families Tax Credits are available are $84,500 for one child, $99,500 for two, $119,900 for three and $120,500 for four children.
For those with a predetermined level of income from employment it’s easy to ensure you don’t miss out and receive the correct entitlement.
For those who are self-employed, it’s much harder because you are required to predict your income which is nigh on impossible for most, so if your need is great and you need the tax credits paid throughout the year it’s necessary to estimate your income. If you do this, it’s best to overestimate your income to prevent a nasty repayment situation (that is, back to the IRD) at the end of the tax year when your income is determined.
On the other hand, it’s easy to miss out completely with Working for Families when you’re self-employed if your income is normally over the thresholds when you have a bad year (and when your income dips) because you will not be registered for Working for Families and it’s easy to overlook.
Many accountants are still not helping their clients in this area and I have taken over several clients who were advised they were not entitled to Working for Families Tax Credits who actually were and who subsequently received substantial payments from the IRD following my intervention. Another client had never made a profit in his business even before he was told he couldn’t claim yet I obtained a refund for him in excess of $15,000! And it’s not too late to claim for prior tax years.
If you need help with your Working for Families Tax Credits or are not getting the advice and help you need from your accountant contact me for a without obligation consultation free of charge.