Do you make under $33,000 per year? If so, you may be entitled to claim the Canada Workers Benefit tax credit. This refundable credit was introduced in 2007 and has been easing the financial burden of countless Canadians.
Knowing the specifics of the Canada Workers Benefit, who is eligible, and how you can claim this credit is important to maximize your tax savings going into the upcoming filing season.
What is the Canada Workers Benefit?
The Canada Workers Benefit (CWB) is a refundable tax credit for low-income individuals and families. This credit is designed to put more money back into the pockets of Canadians who are working but earning a low wage.
The CWB is comprised of two parts: the basic amount and a disability supplement. The maximum basic amount is $1,428 for single taxpayers making under $33,015 and $2,461 for families earning under $43,212. These amounts begin to phase out starting at $23,495 for single taxpayers and $26,805 for families.
The maximum disability supplement is $737 for single individuals making under $37,932 and families with income under $53,037. Like the basic amount, the disability supplement has a phase-out threshold, which starts at $33,018 for single taxpayers and $43,210 for families.
Keep in mind that the amount you can expect to receive is also dependent on which province and territory you reside in. This makes it important to contact a qualified accountant that can effectively guide you based on your tax situation.
Who is Eligible for the Canada Workers Benefit?
The CRA does have limitations on who qualifies for the CWB. Taxpayers must have made earned income, maintained resident status all year, and are over 19 years of age. Taxpayers that are enrolled as full-time students, imprisoned for more than 90 days during the tax year, and have not paid any Canadian income tax are ineligible.
To be eligible for the disability supplement, you must qualify for the disability tax credit and have an approved Disability Tax Credit Certificate on file with the CRA.
How Do You Claim the Canada Workers Benefit?
The CWB basic amount is claimed on the individual tax return on Schedule 6. Claiming the disability supplement is done on Line 316000 if you are claiming yourself and on Line 32600 if you are claiming the disability supplement for a spouse or common-law partner.
Recent legislation changes are also in the works to provide automatic advance payments of the CWB. The automatic payments would be based on information filed in the previous year. These changes are expected to start in July 2023, but are still pending Royal Assent.
Does it sound like you qualify for the Canada Workers Benefit? If so, it’s important that you reach out to a qualified accountant, like the team at NRK Accounting, to ensure you are claiming the full credit you are entitled to.
With over 20 years of experience, we are your trusted advisors when it comes to maximizing tax savings. Reach out to a team member today to schedule a consultation.