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Make a Donation to a NZ Charity, Get 33% Back from The IRD

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Make a Donation to a NZ Charity, Get 33% Back from The IRD
Go to Deal
Lmorepork on 29/03/2022 - 16:29 ird.govt.nz (255 clicks)
Last edited 29/03/2022 - 17:11 by 1 other user

Not a deal per se, but people might not know about this. If you make the donation by 31 March, you'll get your refund much sooner.

Some topical suggestions:
* Red Cross Ukraine appeal
* UNICEF Ukraine appeal

Keep your receipt and claim online via myIR

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You can claim 33.33 cents for every dollar you donated to approved charities and organisations.

You can only claim on donations that added up to the same amount or less than your taxable income during the tax year.

Who can claim

You can claim donation tax credits if all of the following situations apply to you.

  • You're claiming as an individual and not on behalf of a trust, partnership or company.
  • You earned taxable income during the tax year in which you're claiming a donation.
  • You were a New Zealand tax resident at any time during the tax year, 1 April to 31 March.

What you can claim

You can claim tax credits for donations of $5 or more when the donation:

  • was to an approved charity or organisation
  • did not provide any direct benefit to you or your family
  • was not given, bequeathed, done or appointed by will or made by way of a full or partial debt forgiveness.

approved donee organisations

Other

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Comments

  • NovaAlpha on 29/03/2022 - 16:37
    +1

    What's the point of this?

    • mnsl0826 on 29/03/2022 - 16:48

      Donate $100, get $33 back lol

      jokes aside that's pretty common for the wealthy to minimise tax expense

      • akrotohur on 29/03/2022 - 16:57
        +5

        Don't understand how the wealthy work, the net loss is $67, maybe that's why I'm not wealthy…haha

        • pdevonporf on 29/03/2022 - 17:32
          -1

          Positive perception a form of advertising.

        • NovaAlpha on 29/03/2022 - 17:39
          -1

          That's my thoughts exactly.

          I get the point of donation, but from a financial perspective, you actually lose more money.

          Still don't really get the point of why this is on Cheapies.

        • ColdestPandy on 30/03/2022 - 16:53

          I believe it's more in the sense that if a company is going to show social responsibility by making donations then they will clam to have donated xx amount but in reality it's 33% less. This leads to higher credibility for the company at a cheaper cost.

    • [Deactivated] on 29/03/2022 - 16:49
      +2

      It means that you can donate more, if you didn't know about this and were prepared to donate $1000 anyway you now know that you can now donate $1300 and it won't cost you any more and your chosen charity will be better off, this is a good thing.

      • morepork on 29/03/2022 - 22:50
        +3

        Right, except it's actually $1500, you will get a refund of a third which is $500

    • NeM2k2 on 29/03/2022 - 16:49
      +9

      Some people like giving money to help those in need (crazy concept, I know)

      A prompt refund of 33% means those people might be able to afford to donate a little bit more.

  • Senior Mouse on 29/03/2022 - 16:52
    +1

    Yes, the government will take your tax money and give it to charity on your behalf if someone donates in New Zealand.
    If you're benevolent enough to donate, why not make everyone else donate too by apply the above? You've already paid for it!

  • huffboy on 29/03/2022 - 16:53

    66.6% directly out of your pocket. 33.3% is indirectly from your pocket - the government will take it back sooner or later and more.

  • kaz on 29/03/2022 - 16:59

    This is a bit of a plug, but if you sign up with https://www.supergenerous.co.nz they do all of this for you (at a cost) then let you take the 33% back OR put it straight back into the charity. Saves all the paper work and lets your donation keep going.

  • n908671 on 29/03/2022 - 17:34
    +3

    Stand on a corner with a bucket collecting for a certain charity. Donate all the money under your name, claim 33% back.

    I'm sure that's not legal though.

    The other one was that you can't claim against the donation of assets (e.g. a car or a TV) so you make an agreement that you donate XXX amount to the charity who then agrees to buy the asset off you. Meanwhile you claim the 33% of your donation back.

    Don't think that's allowed these days either.

    • NovaAlpha on 29/03/2022 - 17:43
      +4

      "Stand on a corner with a bucket collecting for a certain charity. Donate all the money under your name, claim 33% back."

      So let's say you collect $100. You donate all of it and you get $33 back.

      OR….don't donate at all and keep the entire $100. You then get taxed at whatever your tax rate (let's say 33%), so you lose at most $33. You keep $67.

      I.E - don't donate, unless you wanna do a good deed.

    • aklchp on 29/03/2022 - 18:43

      Not sure if you're joking or not, but you have to donate to registered/approved charities to claim 1/3 back.

      • NovaAlpha on 29/03/2022 - 19:44
        +1

        It was kind of a joke, but also a valid point at the same time.

        I think you completely missed my point though, but whatever.

  • cheapman on 29/03/2022 - 17:41

    Another one is https://www.capnz.org/donate/ who support Kiwis out of poverty and over-indebtness.
    With COVID and the slow down of the economy, services like these are a God send for many who otherwise probably end up hungry and homeless.

  • SpiltMilk on 29/03/2022 - 17:46
    +5

    If you're looking for the real Cheapies deal, consider donating to a charity that has very good evidence that it is cost effective. By donating to the right charity, you can potentially save a statistical life for as little as $6,500 NZD.

    You can donate via the Effective Altruism NZ Charitable Trust - disclaimer, I'm involved with this. Another option could be donating directly to the Against Malaria Foundation who even take credit card for maximum convenience. Both of these organisations are tax deductible within NZ.

  • aklchp on 29/03/2022 - 18:49
    +7

    Thanks for the post, this type of "deal" is refreshing to see on this site, it's more about giving than getting but there's also a discount angle to it!

    The theory behind this law is that you should not pay tax on what you give away to charity. Since the money in your pocket has already been taxed, the govt gives you that tax back (they just round it off to 1/3 of what you gave even if your actual tax rate was different). it's a good law that encourages us kiwis to help others, the more people that know about it the better.

  • saxasianguy on 29/03/2022 - 19:34

    I donated to charity for a whole year, got a letter from them saying I could claim on my donations. Submitted it to IRD and IRD refused it, even with me giving them proof and the letter from said charity that said I could claim money back

    • L3tstaxth1s on 29/03/2022 - 21:28

      Were they a donee organisation/registered charity? Or was it because you didn't have taxable income?

      • saxasianguy on 30/03/2022 - 10:32

        It was the Breast Cancer Foundation and I was on a student allowance so definitely had taxable income and ticked all the criteria. I was going to submit a formal complaint to them about this but didn't end up doing it as I didn't want to stoop to their level of unprofessionalism

    • zemien on 30/03/2022 - 06:30

      I’ve never had any of my claims rejected as long as they meet the basic criteria: approved organisation (basically any registered charity) and a donation receipt which has your name on it.

      And I can do it on IRD website instead of mailing a paper form in. So easy!

      • saxasianguy on 30/03/2022 - 10:32

        It was the Breast Cancer Foundation and I had met all the criteria incl donation receipt with my name on it. One of the reasons why I stopped and won't ever donate to charities or any organisations ever again. The biggest culprit I found was Mcdonald's using their charity as a form of tax evasion https://www.reuters.com/article/us-mcdonalds-tax-idUSKBN0LT1…

        • bigcheese on 30/03/2022 - 10:52
          +2

          I think Sanitarium would be up there.
          Technically an arm of the Seventh-day Adventist Church they maintain their charity status and as such pay no company tax.
          Hard to compete when their costs of doing business are always going to be lower than anyone else producing the same type of product.
          Doesn’t quite seem right but completely legal.

  • Banto on 29/03/2022 - 19:47
    +4

    While it is a great deed you give money to people in need. But be careful that your donation is got going to line the pockets of some overpaid CEO and executives. I have not yet found an NZ equivalent of https://www.charitynavigator.org/ .

    • pdevonporf on 29/03/2022 - 21:50

      You are right a lot of people don't pay $.33 in the dollar in tax you can only claim it off your taxable income.

  • gooddeals on 29/03/2022 - 21:45

    Good reminder.

    Milford foundation is one of the charities that would make your donations go further.

    https://milfordfoundation.co.nz/

    • Beckett66 on 31/03/2022 - 12:18

      Thanks. I was looking for someone to donate to and they seem good.

  • JasonJ on 30/03/2022 - 08:17

    Hi anyone knows why claim back is only 33%, not 39%, 30%, 17.5% etc going by your income bracket since you can't donate more than your income in the year?

    • akrotohur on 30/03/2022 - 09:45

      From what I see, technically this has no direct connection to your income. It's a straight 33.3% credit (look at it like a cash back).

      BUT, they do use your "taxable" income to determine how much "donation" you could claim. The example on IRD website is already showing an example of how one can donate more than their "taxable" income.

      Side note: In theory, IRD could pay you more than they tax you. Using the $1000 taxable income example, the income tax is $105, but you are going to get $333 back for the $1000 donation (cap).

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