TCTM07045 - Calculation of awards: Step 3 - Determining whether income needs to be taken into account and applying income tapers

Income is greater than income threshold

»Ê¹ÚÌåÓýapp Tax Credit (Income Thresholds and Determination of Rates) Regulations 2002, Regs 7, Step 5, Reg 8 Steps 5 and 8

»Ê¹ÚÌåÓýapp difference between the income amount and the “income thresholdâ€� is used to reduce the value of the award due.

If the award is made up of several entitlements each of the entitlements must be reduced in a set order as follows

  • WTC Work Elements entitlement at the taper rate of 41%
  • WTC child care element at the taper rate of 41%
  • CTC child elements at the taper rate of 41%
  • CTC family element at the taper rate of 41%

»Ê¹ÚÌåÓýapp first entitlement to be considered will be the one that appears highest in the order.

A taper amount is calculated by deducting the “income threshold� applicable to the entitlement from the income and multiplying the result by the taper rate for the entitlement, rounding down fractions of a penny.

See worked example (TCTM07APPX2)