Area of Law: Tax Law
Answer # 1702
Working Income Tax Benefit (WITB) and Canada Workers Benefit (CWB)Region: Ontario Answer # 1702
What is the WITB?
The Working Income Tax Benefit (WITB) is a federal refundable tax credit – eligible for the 2018 tax year – intended to provide tax relief for eligible working low-income individuals and families and to encourage those who are not working to enter the workforce.
Who is eligible for the WITB?
If you are 19 years of age or older
To be eligible to receive the WITB, an individual must:
- be 19 years of age or older on December 31st,
- be a resident of Canada, and
- have a working income of over $3,000.
Working income is the total amount of an individual’s or family’s income for the year from employment and business.
If you are under 19 years old
Individuals under 19 years of age may still be eligible for the WITB if they have a spouse or common-law partner or an eligible dependant on December 31st.
An eligible spouse is someone who was:
- your spouse or common-law partner on December 31st,
- a resident of Canada throughout the year,
- 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 or she had an eligible dependant at the end of the year;
- not in a prison or similar institution for 90 days or more during the year, and
- not exempt from income tax in Canada for a period in the year when the person was an officer or servant of another country, such as a diplomat, or a family member or employee of such person.
An eligible dependant is a person who was:
- your spouse or common-law partner’s child,
- under 19 years of age and lived with you at the end of the year, and
- was not eligible for the WITB for the year it is being claimed.
Who is not eligible for the WITB?
You are not eligible for the WITB if:
- you don’t have an eligible dependant and you are enrolled as a full-time student at a designated educational institution for more than 13 weeks in the year,
- you were in prison (or a similar institution) for 90 days or more in the year, or
- you are an officer or servant of another country, such as a diplomat, or a family member or employee of such a person who does not have to pay yearly tax.
How much can you receive?
The WITB is comprised of a basic amount and a disability supplement. The amount payable depends on three factors:
- Where you live,
- Your income, and
- If you:
– are single (including separated, divorced and widowed) with no eligible dependants, or
– have a family (includes single parents, and separated, divorced and widowed parents, and married or common-law couples with or without eligible dependants).
Who can claim the WITB basic amount?
- If you had an eligible spouse, only one of you can claim the basic WITB.
- If you had an eligible dependant, only one person can claim the basic WITB for that eligible dependant.
Who can claim the disability supplement amount?
If you had an eligible spouse, and one of you is entitled to the disability amount, that person should claim both the basic WITB and the WITB disability supplement.
If you had an eligible spouse and both of you are entitled to the disability amount, only one of you can claim the basic WITB.
In Ontario, for the 2018 tax year, the amounts are as follows:
Single individuals without children
- the maximum WITB amount paid is $1,059 if working income is between $7,236 and $12,016
- Individuals eligible for the Disability Tax Credit may also receive a WITB disability supplement of up-to $529
- the maximum WITB amount paid is $1,922 if working income is between $10,688 and $16,593.
Canada Workers Benefit (CWB) for 2019
For 2019 and subsequent tax years, the Federal Government is changing and renaming the WITB to the Canada Workers Benefit (CWB).
- The CWB amount is equal to 26% of each dollar of earned income over $3,000, to a maximum credit of $1,355* for single individuals without children and $2,335 for families (couples and single parents).
- The maximum credit is reduced by 12% of adjusted net income over $12,820 for single individuals without children and $17,025* for families.
* These amounts will be indexed annually for inflation after the 2019 taxation year.
Visit canada.ca for more information on the Canada Workers Benefit for 2019.
For more information on the Working Income Tax Benefit, including the income levels and benefit amounts for claiming the WITB for the 2018 tax year, visit Canada Revenue Agency.
For help filing your tax returns, contact H&R Block.
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