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With tax season coming up, it’s time to think about the credits or deductions that you may be able to claim. For instance, the Canada Workers Benefit (CWB) was implemented to replace the Working Income Tax Benefit (WITB). This new benefit has become important for many Canadians.
Did you receive the Canada Workers Benefit last year? Are you interested in learning what the CWB is and how you can claim it on your income taxes? Keep reading, to learn how to file your taxes with the CWB.
As mentioned, the Canada Workers Benefit was introduced by the federal government in 2019 as a replacement for the Working Income Tax Benefit, which used to provide over $1 billion in tax benefits to millions of Canadians every year.
Today, the CWB is a refundable tax credit for individuals earning a low taxable income of up to $32,244 and families earning a household income of up to $42,197 or under. If eligible, the maximum you can receive is
This benefit can then be used to cover your debts, rent, and other day-to-day expenses. If the CWB benefit is not enough cash to cover all your debts, consider getting a personal loan to consolidate your debts. This will allow you to spread your payments over a longer period of time, making your monthly expenses more affordable.
Just be sure to check your credit score prior to applying for a loan. It can help you understand what kind of interest rates you can qualify for.
Check out how the wage earner protection program can help you.
The Canada Workers Benefit can be collected in two parts:
The size of your CWB depends on your household income, marital status and the age of your children. If your income crosses the individual or family threshold, the amount decreases until you earn a higher income and no longer qualify. Only 1 person per family can receive the benefit.
If you have a spouse or common-law partner that’s eligible for the CWB too, both of you may receive an additional disability supplement. To qualify, each individual must also be eligible for the Disability Tax Credit. When these two credits are combined, you can receive an extra $720.
You can arrange for your CWB to be paid in a lump sum every year via direct deposit. Or, half your benefit can be separated into 4 annual payments and the remaining amount will be delivered as a lump sum after your income taxes are processed.
Learn which tax bracket you fall under.
Unfortunately, only certain Canadians are eligible for the Canada Workers Benefit. Here are some of the criteria you need to qualify:
If you have a spouse or common-law partner, they are eligible for the CWB when they:
If you have dependents, they are eligible for the CWB when they are:
However, you are not eligible for the Canada Workers Benefit if you:
Do you have a child? Check out if you qualify for the Canada Child Benefit.
Even if you’re technically eligible for Canada Workers Benefit, there are factors that can prevent you from qualifying for the full amount. The Canada Revenue Agency typically calculates your CWB Tax Credit based on your:
Another important thing to understand about the Canada Workers Benefit is that there are certain factors that can cause your eligible amount to increase and decrease, such as your marital status, net income, and home province/territory.
The maximum basic amount you can receive from the Canada Workers Benefit is:
Keep in mind that these maximum CWB mounts may be slightly different if your home province/territory is Quebec, Alberta or Nunavut.
Before you apply for the Canada Workers Benefit, don’t forget that you may be eligible for an additional disability supplement of up to $720 per year, if you:
Need help filling out your form? Try using a disability tax credit consultant.
Applying for and claiming your CWB is relatively simple. All you have to do is visit the Canada Revenue Agency website and complete the following steps:
If you prefer, you can also make a request for the Canada Revenue Agency to assess your eligibility for the CWB automatically.
Do you have a disability and live in Ontario? Then you should consider applying for the Ontario Disability Support Program (ODSP).
Remember, the Canada Workers Benefit is sometimes paid on a quarterly basis (4 times per year). Typically, you’ll receive your payments on the fifth day of the month, the payment dates are:
However, you can also receive up to half of your CWB amount through advance payments, which you can apply for using either of these methods:
It’s important to know that if you want to qualify for these CWB advance payments, the CRA must receive your completed Form RC201 by August 31 of that year. If not, the form won’t be processed. Additionally, if you want to keep receiving advance payments, you’ll have to re-apply every year.
If you don’t get your regular or advance CWB payment by the specified date, wait 10 business days, then contact the Canada Revenue Agency to resolve the situation.
Check out the payment dates for the AISH program.
In 2019, the Canadian government replaced the WITB with the CWB and introduced the following key changes to the tax credit program:
Don’t have a large income? Check out these tax tips for low-income earners.
Before you apply for the CWB, don’t forget to check the specified income limits:
Once again, these maximum income thresholds vary depending on your home province/territory (Alberta, Nunavut and Quebec are slightly different).
Looking for more tax credits? Check out these going green tax credits and the GST/HST tax credit.
You could be missing out on some much-needed extra income by not claiming your benefit by the time tax season arrives. Contact the Canada Revenue Agency or visit their website to find out exactly what you need to apply for the Canada Workers Benefit and make the most out of your income tax return.
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Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
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