Formerly known as the Working Income Tax Benefit, the new and improved Canada Worker Benefit is a tax credit that’s issued by the CRA to eligible workers.
It’s designed to provide assistance to lower-income earners, and over three million Canadians are currently eligible for it.
To claim your Canada Worker Benefit, you simply need to complete the information and forms on your annual CRA income tax filing. If you’re eligible, you’ll begin receiving CWB payments the following year.
Below, I’ll explain a bit more about the CWB, who’s eligible for it, how to claim it, and show you the upcoming CWB payment dates.
The Workers Income Tax Benefit (WITB) was first introduced in 2007 by the Canadian government. The idea was to provide tax relief for hard-working, lower-income Canadian taxpayers.
Over time, gradual improvements and changes were made to the benefit until it was eventually renamed the Canada Worker Benefit in 2018. Along with the updated name, the new CWB offers higher payments than the WITB and also increased the income cap threshold to account for current economic conditions.
The Canada Benefit is an annual amount that’s typically issued with your annual tax refund from the CRA. However, taxpayers can also request advance payments, which allows them to receive up to 50% of their total amount at an earlier date in the year.
Currently, just over three million Canadians are eligible for the Canada Worker Benefit. Canada has a total population of 38.25 million, which means that around 8% of Canadians are eligible for the benefit. In other words – most Canadians are not eligible for the benefit.
Who is eligible, though?
Here’s a quick list of the criteria:
- You need to be a Canadian resident
- You must be at least 18 years old by December 31st to claim the CWB on your tax return
- Your income must be lower than the CWB maximum income cap
Individuals who are not eligible for the CWB tax credit include:
- Those who aren’t required to pay taxes in Canada
- Residents who are incarcerated for more than 90 days in a given year
- Taxpayers who are full-time students for more than 13 weeks in a given year
How Much Is The Canada Worker Benefit?
The amount of your CWB benefit depends on several different factors, including:
- Your income
- Your living status (single vs. married)
- The province you live in
Currently, the income caps to receive the Canada Worker Benefits are:
- Individuals: $32,244 (around $671 per week)
- Families: $42,197 (around $879 per week)
Depending on whether you file individually or jointly on your tax return, you cannot make more than this amount of pre-tax income.
The amount you’ll receive for your CWB payment varies based on how much under the income cap you make as well. Individuals who earn less than $22,944 and families who earn less than $26,177 are eligible for the maximum CWB payment.
If you earn more than this, your CWB payment will gradually decrease as you get closer to the stated income cap.
This means that your CWB payment will change year by year, depending on your last reported annual income tax filing.
Claiming the Canada Worker Benefit is relatively easy and can be done by filling out a quick form when you file your annual income taxes with the CRA. If you’re eligible for the benefit (based on your reported income and taxpayer status), then you should start receiving your payments going into the next tax year.
Here’s how to claim the Canada Worker Benefit on your taxes:
- Complete the Schedule 6 form on your CRA income tax filing (for everybody except Quebec, Alberta, or Nunavut residents)
- Take the number on line 42 of the Schedule 6 form and copy it to line 45,300 on your income tax and benefit return
- File your taxes with the CRA and wait to be accepted
Most tax and accounting software programs can help you file for the Canada Worker Benefit as well, so you don’t have to worry about filling out everything by hand.
In addition to the standard CWB payment, eligible taxpayers can also apply for the Canada Worker Disability (CWD) supplement. If you’re approved, you’ll receive extra money with your CWB payment.
To receive the disability supplement, you must already be approved for the Disability Tax Credit Certificate, be eligible for the CWB (based on your income), and be employed (even if it’s just part-time).
If you don’t request an advance for your CWB payment, then you’ll receive the full amount of your benefit along with your tax refund from the previous year. However, if you don’t want to wait until tax time, you can request a CWB advance payment through your CRA My Account.
Here are the upcoming CWB payment dates for 2023:
- January 5th
- April 5th
- July 5th
- October 5th
The Canada Worker Benefit is an excellent tax benefit that lower-income earners and families can take advantage of to provide some financial relief.
The payment is either issued in full with your annual tax refund or issued in part on the CWB advance dates. Claiming the benefit on your return is easy, and I recommend that all eligible taxpayers do so.
Looking for more ways to save money? Keep on reading to see my tips to pay less taxes in Canada next!