The federal and provincial governments designed the working income tax benefit for low-income families and individuals who are already in the workforce and to encourage others to obtain employment.
The benefit offers additional refunds to people who have a substantial income but one below given government thresholds.
The income levels considered adequate by the government depend on the taxpayer’s family situation. You can apply for the WITB by filing your income tax return and filling out the corresponding form.
You are not eligible if you were a full-time student during at least 13 weeks of the year or if you were in prison for 90 days or more.
- To claim the WITB, you must have been a Canadian resident throughout the year and reached your 19th birthday by December 31 of the year.
- Even if you are a student or are younger than 19 years, you may qualify if you have a dependent such as a child or a spouse.
If you are eligible for the benefit, its amount depends on your income level, your family situation and your province of residence. Some provinces have customized the application of the benefit and Québec has its own tax form that includes a version of the WITB.
Paul St-Julien, a CPA in Hudson, Québec, says that income is a major factor when figuring much you will receive. “If your income is too low, you won’t get anything. The benefit starts getting substantial at $9,000 and peaks for an income around $12,000.
After that, it goes down again.” Your family situation and having a spouse who works can influence how much you will receive and can shift the peak.
Applying for the WITB
Before you can apply for the WITB on Schedule 6 of your income tax return, determine whether you have an eligible spouse or dependent. Then, calculate your working income and adjusted family net income.
You’re required to be legally married or living in common law as of December 31st of the year in question to receive the additional spousal amount. You may be entitled to other additional amounts if you are not married or common-law but have a child under 19 residing with you.
If you have an eligible spouse, only one of you can claim the WITB, and only one of you can claim the benefit for an eligible dependent.
To calculate your working income, use your income from employment and self-employment, and the same amounts for your eligible spouse or partner.
To calculate your adjusted family net income, you need your net income and that of your spouse, if applicable, and any universal child tax credit amount either of you received. With this information, you can complete Schedule 6 and calculate your basic WITB.
WITB Disability Supplements
In addition to the basic WITB, you may be eligible for the disability supplement. The disability supplement is available to persons who qualify for the disability tax credit. To qualify, the CRA has to approve your submitted forms T2201A and T2201B; form T2201B must be certified by a qualified physician.
If approved, you are eligible for the non-refundable disability tax credit, and you may fill out the disability section of Schedule 6 to claim the disability supplement.
You can apply to have up to 50 percent of your WITB paid in advance, in the same year as you qualify, to help augment a low income. You receive the balance due when you file your tax returns. To apply for advance benefits, you have to submit form RC201 to the CRA.
Payments are made quarterly in April, July, October and January of the following year. You have to apply every year and can submit the form any time after January 1 and before September 1.
If your situation changes during the year, for example if your income changes or you separate from your spouse, you have to advise the CRA. Your payments may be adjusted or the amount due when you file your tax return may change.
References & Resources
- Paul St-Julien, CPA; Paul St-Julien CPA Inc.; Hudson, Québec
- CRA: Line 453 – Working Income Tax Benefit (WITB)