- How do I qualify for the Working Income Tax Benefit (WITB)?
- If under 19, can I qualify for the WITB?
- What income do I need to qualify?
- How do we calculate the earned income for the WITB?
- What are the maximum amounts for the 2007 WITB?
- At what point could my WITB be reduced?
- How do we calculate the net family income?
- What are the maximum amounts for the WITB Disability Supplement?
- How do I qualify for the WITB Disability Supplement?
- At what point could my WITB Disability Supplement be reduced?
- How were the rates and income thresholds used in calculating the WITB and the Disability Supplement determined?
- Can I receive a WITB prepayment?
- How do I apply for prepayment?
- If I apply in January, for my 2008 WITB, when could I receive my prepayment?
- If I don't apply until August of 2008, is it too late to receive a prepayment?
- If I receive a prepayment must I file a tax return?
- How will the WITB be treated on my tax return?
- How will the prepayment be shown on my tax return?
- Where can I get more information about the Working Income Tax Benefit?
Q.1 How do I qualify for the Working Income Tax Benefit (WITB)?
A.1 As a single individual – you must be a resident in Canada throughout the year, 19 years of age or older at the end of the year, and not enrolled as a full-time student for more than three months in the year.
As a single parent family – you must be a resident in Canada throughout the year and at the end of the year, the primary caregiver of a dependant child in Canada.
As a family (a couple) with no children – you must both be residents of Canada throughout the year and must not be enrolled as full-time students for more than three months in the year.
As a family (a couple) with children – you must both be a resident in Canada throughout the year. If one spouse/common-law partner is not a resident of Canada throughout the year, the resident spouse/common-law partner may be eligible for the WITB as a single individual or parent if the applicable eligibility criteria are met.
Q.2 If under 19, can I qualify for the WITB?
A.2 You can qualify if you are resident in Canada throughout the year and, at the end of the year, the primary caregiver of a dependent child living in Canada or if you have a spouse or common-law partner provided that you are not enrolled as a full-time student for more than three months in the year.
Q.3 What income do I need to qualify?
A.3 Low-income individuals or families must have over $3,000 of earned income (for the purpose of the WITB).
Q.4 How do we calculate the earned income for the WITB?
A.4 Earned income is income from the year from employment and business, computed without reference to losses from those sources. For a couple, for purposes of determining the WITB (not including the Disability Supplement), earned income will be their combined earned income.
Q.5 What are the maximum amounts for the 2007 WITB?
A.5 The maximum amount for a single individual with no dependants is $500.
The maximum amount for families (couples and single parents) is $1,000.
Q.6 At what point could my WITB be reduced?
A.6 In the case of a single individual with no dependants, the 2007 WITB will be reduced by an amount equal to 15% of the net family income (for the purpose of WITB) in excess of $9,500.
In the case of a family (including single parent families), the 2007 WITB will be reduced by an amount equal to 15% of the net family income (for the purpose of WITB) in excess of $14,500.
Q.7 How do we calculate the net family income?
A.7 Net family income is to be calculated on the same basis as used for the Canada Child Tax Benefit (CCTB) and the Goods and Services Tax/Harmonized Sales Tax (GST/HST)—generally net income minus the Universal Child Care Benefit (UCCB).
Q.8 What are the maximum amounts for the WITB Disability Supplement?
A.8 The maximum amount for a single individual with no dependants is $250.
The maximum amount for families (couples and single parents) is $250 for each qualifying individual (other than a dependant).
Q.9 How do I qualify for the WITB Disability Supplement?
A.9 The Supplement can be claimed for each individual other than a dependant who meets the eligibility criteria for the WITB and also qualifies for the Disability Tax Credit.
The individual must have over $1,750 of earned income.
Q.10 At what point could my WITB Disability Supplement be reduced?
A.10 In the case of a single individual with no dependants, the WITB Disability Supplement will be reduced by an amount equal to 15% of the net family income in excess of $12,833.
In the case of a family, the WITB Disability Supplement will be reduced by an amount equal to 15% of the net family income in excess of $21,167.
Q.11 How were the rates and income thresholds used in calculating the WITB and the Disability Supplement determined?
A.11 These are the amounts as announced by the Finance Minister in the 2007 Budget.
Q.12 Can I receive a WITB prepayment?
A.12 Beginning in the 2008 tax year, prepayments can be made for 50% of the estimated WITB for the year, based on estimated earned income and net family income.
Q.13 How do I apply for prepayment?
A.13 Application for prepayment must be made annually, in prescribed form, and submitted no later than September 1st of the tax year.
Q.14 If I apply in January, for my 2008 WITB, when could I receive my prepayment?
A.14 Once approved, the prepayment would be issued in equal amounts in April, July, and October 2008, and January 2009.
Q.15 If I don't apply until August of 2008, is it too late to receive a prepayment?
A.15 If approved in time you may still receive prepayments in equal amounts in October 2008 and January 2009.
Q.16 If I receive a prepayment must I file a tax return?
A.16 You must file a tax return for the year for which any prepayment is made. For example, if you receive a prepayment for the 2008 tax year you must also file a 2008 tax return. In addition, if a prepayment has been made for a year, no prepayment will be made for a subsequent year until the income tax return for the earlier year is filed.
Q.17 How will the WITB be treated on my tax return?
A.17 A schedule to calculate the WITB will be included in the income tax packages for the 2007 and subsequent tax years. The amount of the WITB will reduce your tax payable and any remaining amount will be included in your income tax refund for the year.
Q.18 How will the prepayment be shown on my tax return?
A.18 Beginning with the 2008 tax packages, the schedule for calculating the WITB will include a line for you to subtract any prepayment received for the year. Any WITB in excess of the prepayments will first be applied to reduce your tax payable. Any remaining amount will be included in your income tax refund for the year. If the prepayment exceeds your total WITB for the year, the overpayment must be included in your tax payable for the year.
Q.19 Where can I get more information about the Working Income Tax Benefit?
Q.19 The CRA is committed to providing taxpayers with up-to-date information. Taxpayers are encouraged to check our Web site often - all new forms, policies and guidelines will be posted here as they become available.
In the meantime, please consult the Department of Finance's Budget 2007 documents for details.
