Working Income Tax Benefit (WITB) Fact Sheet
What is the Working Income Tax Benefit (WITB)?
- WITB is a federal refundable tax credit. If you qualify for the credit it will reduce
any taxes you may owe. If you don’t owe any taxes, the WITB will provide money
from the federal government. WITB is designed to encourage employment and to
provide financial support to people who have low incomes. - WITB is part of the tax system – a person who qualifies has to complete Schedule
6 of the T1 General federal tax return. You have to file a tax return each year in order to qualify for WITB.
Who is Eligible to Receive the WITB?
- A person may be eligible if he or she:
- Was a resident of Canada throughout the year;
- Earned income from employment or self employment during the year; and
- Was age 19 or older at the end of the year – or under 19 and residing with
a spouse/common law partner or child.
- A person cannot claim the WITB if he or she was enrolled as a full time student
for more than 13 weeks during the year (unless he or she had an eligible
dependent).
How is the WITB Calculated?
- The WITB is calculated based on a person’s working income (income from
employment or self employment) and his or her “adjusted” net family income
(the amount on line 236 of the tax return – this may be adjusted based on
sources of income). - WITB is calculated differently for single people than for people who have a spouse or common law partner.
- The WITB has two parts: a “basic” component and a “disability supplement”.
- A person can claim the disability supplement if he or she was eligible for the Disability Tax Credit (DTC) during the year.
- In order to claim the WITB basic component a person has to earn more than $3000 from employment in the calendar year (2016).
- In order to claim the WITB disability supplement a person has to earn more than $1150 from employment in the calendar year (2016).
- In 2016, the maximum net income limits to qualify for WITB (for a single person without dependents) are:
- For Basic WITB – $18,529
- For WITB Disability Supplement – $21,958
Does the Working Income Tax Benefit Affect Provincial Social Assistance Benefits?
- WITB benefits do not affect monthly Social Assistance benefits a person may receive (Extended (Disability) Benefits or Transitional Assistance Benefits). For people receiving social assistance, WITB provides some additional money to assist with meeting basic needs for things such as housing, food and clothing.
WITB – Example for a Single Person with a Disability Eligible for the Disability Tax Credit with $6000 Employment Income
- Daniel receives Extended Benefits ($663 per month or $7956 per year) and works part time earning $500 per month from part time employment. His yearly income from work is $6000 and his net income for the year is $13,956.
- Daniel completes Schedule 6 of his 2016 federal tax return and is entitled to claim a refundable credit of $921.85 (on line 453 of his tax return) made up of:
- Basic WITB – $407.85
- WITB Disability Supplement – $514.00
In this example, Daniel would receive $921.85 as a “refund” as he does not owe any taxes on his income. Receiving this refund would not affect Daniel’s Social Assistance benefits.
WITB Example – For a Single Person not Eligible for the DTC with $12,000 Employment Income:
- Marie earns $12,000 per year from employment. She has no deductions from her income so her net income for 2016 is $12,000.
- Marie does not owe federal or provincial tax on her income (after using non-refundable tax credits and the N.B. Low Income Tax Reduction).
- Marie completes Schedule 6 of her 2016 federal tax return and is entitled to claim a refundable credit of $979.25 (on line 453 of her tax return) made up of her basic WITB benefit. Marie would receive a refund for this amount as she does not owe any taxes.
More Information
For more information about the WITB see the Canada Revenue Agency web-site.
