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 income tax and benefit return. However, eligible individuals and families may be able to apply for the next year’s advance payments.
You qualify for the WITB if you are 19 years of age or older as of December 31 st and you are a resident of Canada for income tax purposes throughout the year. If you are under 19 years of age, you may be able to claim the WITB if you’re married or living common-law or have an eligible dependent (child).
You cannot qualify for the WITB if:
1) You do not have an eligible dependent and are enrolled as a full-time student at a university or college or other program for more than 13 weeks in the year;
2) You are confined to a prison or similar institution for a period of 90 days or more in the year; or
3) 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.
There is also a disability supplement with the WITB. If you’re eligible for the disability amount (a non-refundable tax credit that a person with a severe and prolonged impairment in physical or mental functions) you can claim an annual supplement to your WITB. However, your working income must be over $1150 and you must have a T2201 Disability Tax Credit Certificate on file with CRA. Ensure you get this form into CRA before you file for the supplement.
In order to claim the WITB, you need to complete Schedule 6 Working Income Tax Benefit on your tax return for your province and claim it on Line 453. 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). Your claim is based on your family net income, which is an individual’s net income added
to the net income of your spouse, less any Universal Child Care Benefit received and shown on Line 236 of your return.
You can also get advanced payments of the WITB for the coming year. You can get a maximum of 50% of the WITB that you expect to claim on your tax return. You can apply for these advanced payments when you file your tax return for the current year. So, file your 2012 return and you can get advanced payments in 2013 of what you would expect to get for the WITB. Advanced payments are generally done in April, July, October, and January.
If you were overpaid on your WITB advance payments, CRA will notify you on your Notice of Assessment for the taxation year in which you were overpaid. WITB advance payment overpayments will be collected with any amount owing on your Income Tax and Benefit Return. Until your balance is repaid, CRA may keep all or a portion of any future WITB advanced payments that you apply for and any income tax refunds or goods and services/harmonized tax (GST/HST) credits.
What is the maximum amount of WITB I may receive?
WITB is intended for low-income individuals and families who have working income earned from employment or business.
For single individuals without children, the maximum amount of WITB is paid if working income is between $6,956 and $11,231 for 2013. The WITB payment is gradually reduced when net income is more than $11,231 (this is referred to as the base threshold). No WITB is paid when net income exceeds $17,824. These amounts vary slightly for residents of Alberta, Quebec, Nunavut and British Columbia.
For families, the maximum amount of WITB is paid if the family’s working income is between $10,188 and $15,509 for 2013. The WITB payment is gradually reduced when family net income is more than $15,509 (this is referred to as the base threshold). The WITB payment is reduced to zero once family net income exceeds $27,489. These amounts vary slightly for residents of Alberta, Quebec, Nunavut and British Columbia.
For single individuals and families who are eligible and entitled to WITB disability supplement, the income thresholds will be a bit higher. Here’s a chart from CRA: