I earned more than $200 NZD in untaxed income

Do I need to pay tax on my dividends?

If you earned more $200 NZD in income that Inland Revenue (IRD) doesn’t know about (aka untaxed income), you’re required to file an individual tax return (IR3). Hatch gives you the two numbers you need (dividends you’ve received and overseas tax paid), and we’ll walk you through how to fill it out below.

First and foremost, the profit you make from selling your Hatch shares is not counted as income, so it isn’t included in the $200 NZD threshold. Untaxed income can include:

• dividends from your Hatch shares
• self employment income
• rental income
• other income that’s not already taxed before you receive it.

Doesn’t sound like you?

Perhaps one of these will:

• I earned less than $200 NZD in untaxed income
• I had more than $50,000 NZD invested overseas this tax year or I invest through a trust

Key takeaways

• You need to complete an individual tax return (IR3) and pay tax. It’s very straightforward (whew!)
• You may receive a credit for some or all of the tax you’ve already paid in the US from your dividends
• The same rules apply to Hatch Kids Accounts so you (or they if they’re old enough) will need to complete a tax return if they earned more than $200 NZD in untaxed income

How do I fill out my return (IR3)?

An IR3 is an individual tax return that shows the Inland Revenue (IRD):

• Your total income from all sources (including overseas investments) like the ones in Hatch
• Any tax you've already paid
• How much you want to claim in expenses
• If you are due a refund or have tax to pay

It’s easy to do online using myIR.

Here’s what you’ll need for your overseas investments in Hatch

Hatch provides two numbers that correspond to the sections you fill out in your IR3 (how handy!). These are:

• total overseas tax paid (17A)
• total overseas income (17B)

You can find these numbers in Tax Reports in the Reports section in your Hatch account when they become available (we’ll email after the end of every tax year to let you know).

If you earned any other untaxed income you will also need to fill out the relevant sections.

Do I have to pay tax on my profits?

As long as you didn’t buy your shares with the intention of selling them in the short term to make ‘quick money’ (like a trader) then you don’t need to pay tax on the profits you make.

Remember, at Hatch we believe in investing over the long term. #diamondhands 💎🙌

Next steps

1. Work out the total amount of untaxed income you have earned. If it’s just your Hatch dividends, you’ll be able to find the two numbers you need in the Tax Reports section
2. Complete your IR3. There is two ways to go about this:

• Once we release your Tax Report for the year, you can go online through myIR. Find the ‘File my individual tax return’ link and complete it online.
• Alternatively, you can download and fill out an IR3 form manually and send it in using the instructions on the form.

I need more help!

We don’t know your individual tax situation but we are happy to point you in the right direction. If you have any tax questions:

• Dive into our Help Centre articles
• Contact our friendly support team or
• Talk to a tax professional