The working income tax benefit (WITB) is a refundable tax credit in Canada, similar to the Earned Income Tax Credit (EITC) in the United States. Introduced in 2007, it offers tax relief to working low-income individuals and encourages others to enter the workforce. The WITB has been expanded considerably since its introduction.
Video Working income tax benefit
Eligibility
To be eligible for the WITB, the applicant or their spouse must be a Canadian resident for income tax purposes of at least 19 years of age as of December 31st, and cannot be a full-time student. The WITB can be claimed on line 453 of the income tax return if their income exceeds $3,000 for the calendar year. However, the additional paperwork required to claim the credit is complex, involving a the 42-step process on Schedule 6 of Canada's main income-tax form.
Maps Working income tax benefit
Benefits
As of 2016, the WITB is worth up to $1,028 for a single individual and $1,868 for couples and single-parent families. Benefits increase and then decrease with income. At an income of $18,529 for single individuals or $28,576 for families the benefits decrease to $0. WITB is estimated to benefit 1.4 million working Canadians annually, at a cost to the federal government of CDN$1.2 billion. In October of 2017, the Liberal government of Justin Trudeau promised to expand the benefit by $500 million annually, beginning in 2019.
Consistently since 2009, only about 85% of all working Canadians eligible for the WITB have claimed their benefit, with particularly low uptake in Atlantic Canada and the Prairie provinces. In 2017, this left an estimated CDN$175 million in benefits unclaimed by 240,000 eligible low-income Canadians. This is thought by the Canada Revenue Agency (CRA) to be due to a mixture of lack of awareness and the complexity of the forms required to claim the benefit. CRA is working to increase uptake by CRA is expanding its support for free volunteer tax-preparation services and by scaling up a 2016 pilot project in New Brunswick, which highlighted the program to persons likely eligible for the program and was judged to have had a "positive impact."
References
Source of article : Wikipedia
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