Requesting income tax refund transfers

Modified on Tue, 30 Apr 2024 at 01:44 PM

Inland Revenue allows a taxpayer’s income tax refund to be transferred to multiple accounts and taxpayers. These requests are made as part of e-filing the income tax return. Inland Revenue accepts a maximum of twenty requests per tax return.

This functionality is only available for 2021 tax years onwards, and the ability to switch between the paper tax return transfers and multiple transfers is only in 2021. Multiple transfers is switched on for 2022 onwards.

Entering an Income Tax Transfer

  1. In Workpapers > Tax Payments, select New > Tax Transfer. This creates a tax transfer request transaction.
  2. Update the details of the tax transfer request. The default transaction is a transfer to the next year’s provisional tax for the taxpayer.
    • Transfer Period [E-filed]: the tax year the transfer will be made to.
    • Transfer to account: the recipient of the transfer. This can be the taxpayer themselves or another taxpayer.
    • IRD Number [E-filed]: the recipient’s IRD number.
    • Is Associated [E-filed]: tick if the recipient is an associated entity of the taxpayer
    • Date: the date of the transaction. This is informational only.
    • Transaction [E-filed]: the account type at Inland Revenue the transfer is being made to.
    • Debit [E-filed]: the amount to be transferred. This is always entered as a positive number.
    • Is Pending: tick to e-file the transaction and include it in the Payment Schedule. It is ticked by default.
  3. Click Save.
  4. Repeat to add more transfers.

Go to Tax Return > Refunds and/or Transfers to check the total transfer requests is not greater than the total refund.

Tips for Successful Transfers

Sometimes transfers may not be processed correctly by Inland Revenue even if they are filed correctly. There can be a number of reasons for that.

The transfers requested exceed the refund available

If a return is assessed with a lower than expected refund, IR will transfer what they can up to their assessed refund amount.

If multiple transfer requests are made, and the available refund is less, they will be processed to the extent of the refund available. Therefore one transfer may be less or some may not be processed at all. There is no way to specify the order in which transfers are processed.

The receiving account is locked

If the account the transfer is being made to is locked by Inland Revenue, they will not process the transfer. In this case the funds will be refunded to the taxpayer.

This can occur if the account is marked as using tax pooling, or Inland Revenue deem the account to be closed, such as a past period.

Inland Revenue does not have bank details

Inland Revenue needs to be able to complete all the actions on a refund at one time. Where a refund is partially transferred and partially refunded, it will not be processed if they do not have a bank account to refund the balance to.

Once Inland Revenue have a bank account, both the transfer and the refund will be processed.

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