As a Canadian worker, you may be eligible for the Canada Workers Benefit (CWB), a refundable tax credit designed to assist low-income individuals and families. The CWB is a replacement for the Working Income Tax Benefit (WITB), which was phased out in 2019. In this blog post, we’ll cover everything you need to know about the Canada Workers Benefit.
Who is eligible for the CWB?
To qualify for the Canada Workers Benefit, you must meet the following criteria:
- Be a resident of Canada for tax purposes throughout the year.
- Be at least 19 years of age or older on December 31st of the tax year.
- Have earned income from employment or self-employment during the tax year.
- Have a net income below the maximum threshold for the tax year.
How is the CWB calculated?
The Canada Workers Benefit is calculated based on your income and family status. There are two components to the CWB: a basic amount and a disability supplement.
The basic amount is calculated as a percentage of your earned income, up to a maximum amount. The percentage is highest for single individuals without dependents and gradually decreases as family income and size increase. The maximum basic amount for the 2021 tax year is $1,381 for single individuals without dependents, and $2,335 for families.
The disability supplement is an additional amount for individuals who have a disability or have a dependant with a disability. The amount is based on the family’s net income and can be up to $719 for the 2021 tax year.
How do I apply for the CWB?
If you’re eligible for the Canada Workers Benefit, you’ll automatically receive it when you file your tax return. However, if you haven’t filed a tax return in the past or your circumstances have changed, you may need to apply for the CWB. You can apply using the Canada Revenue Agency’s My Account service or by filling out Form RC151, Canada Workers Benefit Advance Payments Request.
When will I receive the CWB?
If you’re eligible for the Canada Workers Benefit, you’ll receive it as a lump-sum payment when you file your tax return. However, if you’re in need of financial assistance throughout the year, you can apply for advance payments of the CWB. Advance payments are paid on a monthly basis and can be up to 50% of the estimated benefit for the year.
Conclusion
The Canada Workers Benefit is a tax credit designed to assist low-income individuals and families in Canada. If you’re eligible, you’ll receive a refundable tax credit based on your income and family status. To ensure you receive the benefit, make sure to file your tax return and keep your information up-to-date with the Canada Revenue Agency.