Do You Qualify For the Working Income Tax Benefit?
Many Canadians qualify for the Working Income Tax Benefit (WITB) which is a refundable tax credit to financially help working low-income individuals and families. Former CRA Tax Expert Barry Ho helps Canadians like you see if you can qualify for the Working Income Tax Benefit and other related tax credits, like the Disability Tax Credit.
To find out if you qualify for the Working Income Tax Benefit or Disability Tax Credit, contact Barry Ho at 1-855-546-9199.
Learn More About the Working Income Tax Benefit…
(The following information exerpted from the Government of Canada, Canada Revenue Agency, Working Income Tax Benefit internet site, January 2012.)
1. What is the Working Income Tax Benefit?
The Working Income Tax Benefit (WITB) is a refundable tax credit intended to provide tax relief for eligible working low‑income individuals and families who are already in the workforce and to encourage other Canadians to enter the workforce.
You can claim the WITB on line 453 of your 2010 Income Tax and Benefit Return if your working income is over $3,000, and you meet all the eligibility criteria.
2. Are you eligible for the WITB?
You are eligible for the WITB in 2010 if:
- You are 19 years of age or older on December 31, 2010; and
- You are a resident of Canada for income tax purposes throughout 2010.
If you are under 19 years of age, you may still be eligible for the WITB, if you have a spouse or common-law partner or an eligible dependant on December 31, 2010.
You are not eligible for the WITB in 2010 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 2010;
- You are confined to a prison or similar institution for a period of 90 days or more in 2010; 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.
Jennie is 23 years old and has a 3-year-old daughter. She attended university full-time in 2010. Even though she was enrolled as a full-time student at a designated educational institution for more than 13 weeks in 2010, she is still eligible for WITB since she has an eligible dependant.
3. What is the disability supplement?
If you are eligible for the WITB and the disability amount, you may also be eligible to claim an annual disability supplement for 2010.
To be eligible for the disability supplement, your working income must be over $1,150 and we must have an approved Form T2201, Disability Tax Credit Certificate on file. If you have not already sent us a completed Form T2201, you must do so to receive the disability supplement.
4. What are the WITB provincial reconfigurations?
Some provinces/territories have exercised the option to reconfigure the WITB calculation based on specific social and economic realities.
Note: We will determine the amount of WITB to pay based on the eligible individual’s province or territory of residence at the end of the year.
5. How can you claim the WITB?
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.
6. What is an eligible dependant?
For WITB purposes, you have an eligible dependant if you have a child who, at the end of 2010:
- lives with you;
- is under 19 years of age; and
- is not eligible for the WITB.
For WITB purposes, eligible dependants can be registered by completing Form RC66, Canada Child Benefits Application. However, if your dependants are already registered for the goods and services tax/harmonized sales tax (GST/HST) credit, we will automatically take them into consideration when calculating your WITB amount.
7. What is an eligible spouse?
For WITB purposes, an eligible spouse at the end of 2010 is a person who meets all of the following conditions:
- is your cohabiting spouse or common-law partner on December 31, 2010;
- is a resident of Canada throughout the year 2010;
- 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.
8. What is the family net income?
Family net income is an individual’s net income added to the net income of their spouse or common-law partner, minus any amount reported for Universal Child Care Benefit (UCCB) (line 117 of the Income Tax and Benefit Return). Net income is the amount on line 236 of the Income Tax and Benefit Return.
9. What is the working income?
Working income for a tax year is the total amount of an individual’s or family’s income for the year from employment and business (excluding losses).
10. What are WITB advance payments?
Eligible individuals and families have the option to apply for WITB advance payments. The WITB advance payments correspond to a maximum of 50% of the WITB refundable tax credit (including the disability supplement, if applicable) that you expect to claim on your 2011 Income Tax and Benefit Return. Any WITB that you are entitled to and did not receive as advance payments will be paid to you when your 2011 Income Tax and Benefit Return is assessed.
The annual maximum amount you can receive in WITB advance payments is:
- $462.50 for single individuals without eligible dependant(s); or
- $840 for families (individuals with an eligible spouse, common-law partner or eligible dependant).
The annual maximum WITB advance disability supplement you can receive is $231.25 for an individual. If more than one individual per household is entitled to the disability supplement, we will only pay one individual the supplement in advance payments. The other individual will claim the supplement on his/her Income Tax and Benefit Return by completing Schedule 6.
Note: The rates and eligibility rules may vary in some provinces and territories.
11. When should you apply for the WITB advance payments?
To receive the WITB advance payments for 2011, you need to apply between January 1 and August 31, 2011 by completing Form RC201, Working Income Tax Benefit Advance Payments Application for 2011. Applications for advance payments received after August 31, 2011 will not be processed.
12. When will you receive your advance payments?
After your application is processed, your WITB advance payments will be divided by the number of payment dates left in the year and will be paid in equal instalments on the remaining dates. The payment dates are April 5, July 5, October 5, 2011 and January 5, 2012. You will need to file your Income Tax and Benefit Return for every year you received WITB advance payments and to complete an RC201 application form every year in order to receive the WITB advance payments.
In March 2011, Cathy and Peter applied for the WITB advance payments. Their application was processed on April 10, 2011 and their expected WITB advance payment for the year is $360. Since the first payment date (April 5, 2011) for the year has passed, Cathy and Peter will receive three equal instalments of $120 (July 5 and October 5, 2011 and January 5, 2012).
13. What to do when the WITB advance payment recipient has died?
You should contact us if a WITB advance payment was received and the recipient has died. Please return the payment to us and provide us with the date of death.
If the WITB recipient dies after June 30, he or she is no longer eligible for WITB advance payments, but may still be eligible for the WITB refundable tax credit on his/her final Income Tax and Benefit Return.
Married or common-law couples
The surviving spouse or common-law partner of a deceased WITB recipient must submit a new application before September 1 if he or she wishes to continue receiving WITB advance payments for himself/herself.