The Working Income Tax Benefit (“WITB”) is a refundable tax credit intended to provide tax relief for eligible working low-income individuals. Because it is a benefit / credit, taxpayers may be entitled to the Working Income Tax Benefit even if they do not pay federal income tax. It is designed to help individual families who have a low-income household.
The general rule is that a taxpayer is eligible for the Working Income Tax Benefit if their working income is over $3,000.00 for the year and they meet the following two requirements:
- The taxpayer must be at least 19-years-old on December 31st of the tax year; and
- Is a resident of Canada for income tax purposes during the same year in question.
A taxpayer may also be eligible for the Working Income Tax Benefit if they are 19-years-old, and have a common-law partner or spouse, or an eligible dependant on December 31st of the year in question.
Taxpayers are not eligible for the Working Income Tax Benefit if they do not have an eligible dependent and are enrolled full-time as a student at a designated school for more than 13 weeks in a year. Taxpayers are also not eligible if they are in prison for 90 days or more during the tax year in question. Finally, a taxpayer is not eligible if they do not have to pay tax in Canada because they are a foreign diplomat or officer, or a family member or employee of a person in that position.
What Amount will I Receive?
The amount of benefit a taxpayer qualifies for is based on their working income. The premise of the Working Income Tax Benefit is to help taxpayers who have a low income. Thus, if a taxpayer made more money than the threshold amount established by the Canada Revenue Agency (“CRA”), they will not receive a benefit amount.
The threshold amounts established by the CRA are based on the status of the taxpayer’s family and where they are located. The taxpayer’s marriage status, whether they have dependents, and what province they live in impact the amount received as a benefit as well.
The CRA provides a chart that explains the various working income thresholds by family makeup. This is the chart you use to determine whether you are eligible for the benefit or not. The chart for 2017 is found here.
How to Determine the Working Income Tax Benefit Amount I will Receive
The CRA provides a child and family benefit calculator to taxpayers, which can be found here.This calculator will provide the taxpayer with a fairly accurate estimate of the benefit amount with which they qualify for.
To use the calculator, you will need to answer questions about your working income for the year and your family makeup. After providing this information, the calculator will tell you whether you qualify for a benefit, and if so, how much you qualify for.
How do I Claim the Working Income Tax Benefit?
Another way to calculate your Working Income Tax Benefit refundable tax credit amount is by completing Schedule 6, Working Income Tax Benefit for your province or territory income tax specific return. As mentioned above, once this amount is calculated using the above-mentioned form, you then claim the amount on line 453 of your income tax return.
What if I am Disabled?
Taxpayers may also claim a “disability supplement” if they are eligible for the Working Income Tax Benefit and the disability amount. Further requirements for eligibility of this supplement can be found here.
If you have questions about the Working Income Tax Benefit, or the CRA is giving you trouble regarding yours, call us today! We can help!
This article provides information of a general nature only. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in this article. If you have specific legal questions you should consult a lawyer.