Add an interest income workpaper

Overview

Interest income workpapers can be added to interest income to correctly record, disclose and claim resident withholding tax (RWT) credits.

Add an interest income workpaper

1. From the entity's tax year summary, in the navigation bar select Workpapers > Accounts.
2. (If relevant) from the Accounts screen select Trial balance.
3. From the Trial balance screen, locate the account that you want to add the workpaper to and in the Workpaper column, select Add workpaper.
4. From the Add workpaper drop-down, select Interest income. This will add the workpaper to the account and create a link to it directly from the trial balance.
5. Select Interest income to open the workpaper.  

Add information to the workpaper

Once within the workpaper, the basic workpaper features are accessible, such as queries, notes and files.

The second half of the workpaper contains the features specific to interest income:

• Add or amend the date interest income was Paid.
• Select the pencil icon to editing the Gross income figure. If the interest income in the trial balance is not gross(i.e. include all RWT) then you will need to edit gross income to include it all.
• Less RWT: enter the total RWT on the interest income as a negative number, or use a formula.
• Less Non-resident withholding tax (NRWT): enter the total NRWT on the interest income as a negative number, or use a formula.
• Net income calculates as gross income, less RWT and NRWT.
• Permanent difference: If gross income has been edited, the difference between the trial balance figure and gross income figure will display here.
• A Narration is populated based on the account description but can be edited, and will be how income is disclosed in the tax position. If more than one workpaper contains the same narration, figures from those workpapers will be grouped into one line on the Statement of Taxable Income (SOTI). 
• RWT and NRWT credits: sums the total credits contained in the workpaper.
• Tax form disclosure: is a locked field, and will disclose all income as NZ interest income in the tax return.

Troubleshooting and FAQs

Interest income account contains some overseas interest income

Inland Revenue (IR) requires foreign interest to be disclosed in the tax return as foreign income, not NZ interest income. To do this, either add a breakdown and then add a foreign interest workpaper to the account, or create a separate account in your trial balance for foreign interest, and add the foreign interest workpaper.

Interest income is in both prefill and the trial balance

We recommend either not bringing in prefill, or adding a permanent different workpaper instead of an interest income workpaper to the account so it is not returned as income.

Related articles

Understanding workpapers

Add a file to an entity

Add a query or note

View the income tax position

Add or remove a breakdown

Add foreign income