Working income tax benefits (WITB) is a federal refundable tax credit to encourage and rewards work as well as offsets federal payroll and income taxes.This benefit encourages workers to enter the paid workforce for those stuck behind the “welfare wall” or to remain in it for those already working in low-paying jobs.
How much you can get from working income tax benefits
In 2014 tax year, for single individuals without children, the maximum amount of basic WITB is $998,. The WITB payment is gradually reduced when net income is more than $11,332 and is eliminated when net income exceeds $17,986.
For families, the maximum amount of basic WITB is $1813. The WITB payment is gradually reduced when family net income is more than $15,649 and is eliminated when family net income exceeds $27,736.
Disabled persons are entitled to a WITB disability supplement.
You can use the working income tax benefits calculator in CRA website.
How to claim the Working income tax benefits
To calculate your WITB refundable tax credit, complete Schedule 6, Working Income Tax Benefit for your province or territory specific income tax and benefit return. The WITB amount calculated on Schedule 6 must then be claimed on line 453 of your return.
Are you eligible for the disability supplement in WITB?
To be eligible for the disability supplement, your working income must be over $1,150 and the Canada Revenue Agency (CRA) must have an approved Form T2201, Disability Tax Credit Certificate on file.
What is an eligible dependant in WITB?
For WITB purposes, you have an eligible dependant if you have a child who, at the end of the year:
- lives with you;
- is under 19 years of age; and
- is not eligible for the WITB.
What is an eligible spouse in WITB
For WITB purposes, an eligible spouse at the end of the year is a person who meets all of the following conditions:
- is your cohabiting spouse or common-law partner on December 31st;
- is a resident of Canada throughout the year;
- is not enrolled as a full-time student at a designated educational institution for a total of more than 13 weeks in the year, unless he/she has an eligible dependant at the end of the year;
- is not confined to a prison or similar institution for a period of 90 days or more during the year; and
- is not an officer or servant of another country, such as a diplomat, or a family member or employee of such person.
You are not eligible for the WITB if:
- You do not have an eligible dependant and are enrolled as a full-time student at a designated educational institution for more than 13 weeks in the year;
- You are confined to a prison or similar institution for a period of 90 days or more in the year; or
- You do not have to pay tax in Canada because you are an officer or servant of another country, such as a diplomat, or a family member or employee of such person.