Inland Revenue (IRD) says it's concerned following a media report on Thursday that alleged it would provide a tax refund to people who were working from home.
The story, which has since been corrected, said employees who were working from home could organise with their employer to receive a tax refund of up to $15 per week to cover their expenses. These include using extra power and any other costs incurred from working at home.
But IRD has clarified this is incorrect. Instead, a determination was issued in April that said employers could pay their employees up to $20 per week tax-free to cover any at-home expenses. If employers choose to pay this, they don't have to estimate or show what the expenses are, but it must be paid out of their pocket rather than IRD's.
IRD said when it issued the determination it doesn't want employers to feel like they have to give their staff this payment if they're working from home.
"It is also acknowledged that many employers will not be in a financial position to make additional payments to employees during the COVID-19 pandemic," Tax Counsel group leader Susan Price said in the determination.
Previously, employers could only make a $5 per week tax-free payment to employees for phone expenses and they needed to prove this cost had been incurred from working from home. But it was raised in April to recognise many more people weren't working in their normal workplace and they would be paying a variety of extra costs.
Also included in the April determination was an update so employers could make a tax-free payment of up to $400 per employee for any furniture expenses. No evidence is needed on how this money is spent either.
These payments are only a "temporary response" to COVID-19 and only apply to expenses incurred between March 17 and September 17.