The CWB, defined
The Canada Workers Benefit (CWB) replaced the Working Income Tax Benefit (WITB) in 2019. It’s a refundable tax credit for low-income individuals with an adjusted net income between $3,000 and $33,015 or low-income families with an adjusted family net income between $3,000 and $43,212. The maximum benefit is $1,428 for individuals and $2,461 for families. An additional supplement is available to eligible individuals with disabilities.
How the CWB works
The benefit kicks in when you begin to earn an employment income of $3,000. You get 27% of every dollar you earn above that amount until the maximum benefit is reached for your family situation and province. When your household taxable income reaches a specific threshold, the benefits are reduced by 15% until it is completely eliminated, at a higher threshold. Only one person per household can receive the CWB, but each spouse may receive an additional disability supplement if they are both eligible.
The benefit comes in the form of a refundable tax credit. Normally, your tax refund cannot exceed what you actually paid in tax — the Canada Revenue Agency (CRA) is merely refunding an overpayment. In the case of a refundable tax credit, the CRA dips into its own coffers to pay you.
You can choose to get the exact amount in a lump sum once a year, or if eligible, spread it out throughout the year ((half the estimated amount in three advance payments throughout the year, and the rest in a lump sum after your taxes are assessed).
CWB eligibility
To receive the CWB, you must:
Be at least 19 years old by the end of the tax year, or be under 19 years old, but have a spouse, a common-law partner, or a child that lives with you
Be a resident of Canada for income tax purposes throughout the year
Earn $3,000 from working income, but have total adjusted family net income of less than $32,244 for singles or $42,197 for families
You are not eligible for the CWB if you are:
A full-time student for more than 13 weeks in the year, unless you have a child who lives with you
In prison for 90 days or more during the year
Not required to pay tax in Canada because you are a diplomat or in a similar situation or were a family member who lived with a person in this situation. If you were an employee of a person in this situation at any time in the year, you also aren't eligible.
You are eligible for the disability supplement if you are both:
Eligible for the Disability Tax Credit
Eligible for the CWB
How your CWB benefit is calculated
The amount you receive is based on the following factors:
Marital status
Province or territory of residence
Working income
Adjusted family net income
Eligibility for the disability supplement
You must first add up for yourself and an eligible spouse any:
Employment income
Taxable scholarships, fellowships, bursaries, and artist project grants
Self-employment income
Tax-exempt working income earned on a reserve (including this income is optional for the CWB) or an allowance received as an emergency volunteer
If your spouse is ineligible to receive the CWB, and you also do not have a child living with you, you must calculate your CWB as if you were single. Leave out any of your partner’s income. Your benefit will be calculated and distributed as if you were unattached.
For example, if you are child-free and your husband has been in prison for six months, then you do not need to include any of his income and you will receive a maximum benefit of $1,395.
Otherwise, you must include your total household taxable income and one of you will receive the CWB. If you can’t decide which partner will get the money, then the CRA will decide for you.
Next, if your working income is above $3,000, then you must determine your income for the purposes of the benefit (also called adjusted family net income (AFNI)). The following applies:
Net income on line 23600 (previously known as line 236) on your return. This is all sources of income, such as pensions, capital gains, social assistance payments, employment, minus all deductions, such as RRSP contributions
Plus tax-exempt income received on a reserve (minus the deductions related to that income) or an allowance received as an emergency volunteer
Plus any repayment of the universal child care benefit (UCCB) and RDSP
Minus income from the UCCB or RDSP
Based on this figure, you have your total AFNI, and you can calculate your CWB: 27% of every dollar between $3,000 and the first income threshold, then a clawback of 15% of every dollar after the final income threshold.
Individuals eligible for the Disability Tax Credit and CWB may also receive a CWB disability supplement. The maximum amount is $737 in 2023 for each person with a disability.
The government provides a calculator for all the benefits it offers and can estimate the amount you may get.
Applying for the CWB
Fill out Schedule 6 to claim the CWB. The calculated refundable credit will appear on line 45300 and will be included in your total refund amount (or used to reduce your amount owing if you're in that situation). If you forget to claim the CWB, the CRA will calculate your CWB benefit when assessing your submitted return.
