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The Canada Workers Benefit (CWB) came in 2019 as a replacement for the Working Income Tax Benefit (WITB). In the wake of Covid-19, this new benefit has become nothing but inevitable for every individual in Canada.
If you have not received this benefit yet, then you might be the one who needs this guide the most. If you are looking for a complete guide on what the CWB is and how you can claim it in your case, keep reading this post as you are about to get the answers to all your questions.
What is The Canada Workers Benefit (CWB)?
The Canada workers benefit (CWB) is a refundable tax credit to assist individuals and families who are working and earning a low income. If your family is earning a household income of $36,482 or under, you may qualify. If you are eligible, you will receive 26% of every dollar you earn over the $3,000 threshold, to a maximum of $1,355 as a single member or $2,335 as a family.
How Does CWB Work?
The Canadian workers’ benefit has two parts: one, basic amount and two, a disability supplement.
A Basic Amount: The size of your CWB is determined by your household income, marital status, and child’s age. If your income exceeds the individual or family criteria, the amount you get is reduced by 12% until you earn a higher income and are no longer eligible. The benefit is only available to one individual per family.
A Disability Supplement; If you have a CWB-qualified spouse or common-law partner, both of you may be entitled to a disability supplement. Each person must also be eligible for the Disability Tax Credit in order to qualify. You can get an extra $713 if you combine these two credits.
You can have your CWB paid in a lump sum by direct deposit once a year. Alternatively, half of your benefit can be split into four annual instalments, with the remainder provided as a lump sum after your taxes are processed.
Eligibility Criteria For Canada Workers Benefit CWB
Unfortunately, the Canada Workers Benefit is only available to a select group of Canadians. Here are some of the qualifications you must meet:
- Be a Canadian permanent resident (for tax purposes during the year)
- By the conclusion of the current tax year, you must be 19 years old.
- If you are under the age of 19, you must live with your spouse, common-law partner, or kid.
- Earning a minimum of $3,000 per month via work or self-employment
- If you’re single, you can earn up to $24,112 every year.
- If you’re a family, a maximum income of $37,173 is required.
Similarly, if you have a spouse or common-law partner, they can apply for the CWB if they meet the following criteria:
- Stay with you for the duration of the current tax year.
- All other CWB eligibility conditions must be met.
If you have dependents, they may be eligible for the CWB if they meet the following criteria:
- Under the age of 19
- Your spouse’s or common-law partner’s child
- Ineligible for the CWB in any other way
Who is Not Eligible for CWB?
The Canada Workers Benefit, on the other hand, is not available to you if you are:
- A foreign officer or servant who does not have to pay Canadian taxes and has been detained for 90 days or more during the current tax year
- A foreign officer’s or servant’s employee or family member
- Full-time student for more than 13 weeks out of the year and do not live with a child
How to Apply & Receive CWB?
It’s pretty easy to apply for and receive your CWB. To get started, go to the Canada Revenue Agency’s website and follow the procedures below:
- Fill out and submit “Schedule 6, Canada Workers Benefit” if you’re filing a paper tax return.
- Follow the directions on your certified tax software if you’re filing your tax return electronically.
- To be eligible for the additional CWB Disability Supplement, you must:
- If your spouse or common-law partner is eligible for the disability tax credit, he or she must claim both the ordinary CWB and the disability supplement.
- If both spouses/partners are qualified, only one of you can claim the normal CWB, but you must each file a separate Schedule 6 form to claim the disability supplement.
You can also request that the Canada Revenue Agency assess your eligibility for the CWB automatically if you want.
Income Requirements for The Canada Workers Benefit
Don’t forget to verify the mentioned income restrictions before applying for the CWB:
- When your adjusted net income exceeds $13,064, your CWB begins to decrease. With an income of more than $24,573, you will be ineligible for any basic benefits.
- When your adjusted family net income exceeds $17,348 in most provinces, your CWB begins to decrease. So, with an income of more than $37,173, you will be ineligible for any basic benefits.
These maximum income thresholds, once again, vary based on your local province or territory (Alberta, Nunavut and Quebec are slightly different).
The Bottom Line
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