New Zealand donation tax credits: claims and limits

Donation tax credits apply to qualifying money gifts to approved organisations, subject to taxable income, receipt and claim-year requirements.

Credit rate

One-third (33.33%)Inland Revenue, IR255 donation tax credits

Minimum qualifying gift

$5Inland Revenue, IR255 donation tax credits

Annual credit limit

Lower of one-third of taxable income and one-third of eligible donationsInland Revenue, donation tax credit rules

Receipt submission limit

4 yearsInland Revenue, donation receipt requirements

The credit and the income cap

Inland Revenue describes the credit as one-third of eligible donations. Its IR255 guide also expresses that rate as 33.33% and states that qualifying gifts of money are $5 or more. Goods and property do not qualify. The percentage is a published description of the credit, rather than a calculation of an individual's refund. Approved donee status matters: an organisation's charitable purpose alone does not establish that every payment to it qualifies. Inland Revenue, IR255 donation tax credits (opens in a new tab).

Who can claim and which gifts qualify

The claim is for an individual, rather than a trust, partnership or company. The individual must have earned taxable income in the donation's tax year and been a New Zealand tax resident at some time during that year, which runs from 1 April to 31 March. A donation is a voluntary money gift providing no direct benefit to the giver. Gifts providing a direct benefit to the donor or family, forgiven debts and gifts under a will are excluded. Inland Revenue, donation tax credit rules (opens in a new tab).

Taxable income limits the annual claim

The annual credit is the lower of one-third of taxable income and one-third of total eligible donations. Where brought-forward losses exceed taxable income, no credit can be claimed. Donations exceeding the donor's taxable income can be split so a partner claims the remainder, within that partner's income limit. Payroll giving donations cannot be claimed again at year end because the tax credit has already been received during the year. Inland Revenue, donation tax credit rules (opens in a new tab).

Receipts and the year of the donation

Receipts must come from approved donee organisations and contain the required information. For most people the four-year submission period starts on the next 1 April after the donation. The credit belongs to the year the donation was made, rather than the year the receipt is submitted. A late balance date changes the start of the submission period to the day after that balance date. A phone bill is not a receipt for a donation made by phone. Inland Revenue, donation receipt requirements (opens in a new tab).

Submitting the claim

Donation receipts can be submitted during the year through myIR. Without myIR, the Tax credit claim form, IR526, accepts receipts after the tax year ends on 31 March. Inland Revenue requires the approved organisation, donation type, receipt date and amount, together with the receipt attachment. Inland Revenue, submitting donation receipts (opens in a new tab).

Scope and processing limits

This guide is general information about donation tax credits. It does not establish an organisation's approval, validate a receipt, assess a gift's direct benefit or calculate taxable income after losses. It does not calculate a refund or divide donations between partners. No donation tax credit calculator or worked claim example is provided here.

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