Understanding the Canada Workers Benefit (CWB)

What is CWB?

The Canada Workers Benefit (CWB) is a refundable tax credit designed to supplement the earnings of low-income workers and encourage labor force participation. This benefit was previously known as the Working Income Tax Benefit (WITB) and was redesigned to be more accessible and generous. As a result, more Canadians are expected to qualify for the new benefit, making a substantial difference in the lives of working individuals and families who are living in poverty.

Who is Eligible for the CWB?

To be eligible for the CWB, one must be a resident of Canada for income tax purposes and in the age group of 19 and over. However, exceptions are provided for individuals who are below 19, if they have a spouse or common-law partner, or if they have a child living with them. As well, individuals must earn a working income of more than $3,000 in the year and should be outside of a prison for more than 90 days during the year.

How Much Can You Receive?

The amount of CWB one is eligible for depends on various factors. The quantum is different for individuals without dependents and those with children. For instance, in 2021, families without children can receive up to $1,381, while families with children can receive up to $2,379. The benefit is gradually reduced if the adjusted net income is more than $13,080 for individuals without children and $17,348 for families. The benefit amount is paid to those whose income tax and other contributions are less than the calculated CWB.

Process to Apply for the Canada Workers Benefit

Gather the Necessary Information

Before initiating the CWB application process, it's necessary to gather all the required information. This includes income details from jobs or self-employment, disability-related expenses if applicable, marital status, number of children, and province or territory of residence. Having this information in hand will facilitate a smooth application process.

Filing Your Tax Return

The primary method to apply for the CWB is by filing your income tax return. Doing so will automatically determine whether you’re eligible. It should be noted that you should check the "Yes" box in the Canada workers benefit section on the first page of the income tax return. This process allows the Canada Revenue Agency to calculate the CWB, and it also enlists you to receive associated benefits in the future.

Claiming the Disability Supplement

If you are eligible for the disability tax credit, and have a working income of over $1,150, you may also be eligible for the CWB disability supplement. To claim this, ensure your valid Form T2201, Disability Tax Credit Certificate, is sent over to the Canada Revenue Agency. By indicating your eligibility on Schedule 6 of your tax return, you can claim the disability supplement for CWB.

Tracking Your CWB Payments

How Can You Receive Your Payment?

CWB payments are typically made through direct deposits or cheques. Direct deposits are the primary method, and the payments are sent over to the bank account linked to your Canada Revenue Agency account. If not opted for direct deposit, cheques are sent over to your postal address.

When Do You Receive Your Payment?

Based on the return filed, the CWB payments are usually made within eight weeks after the Canada Revenue Agency sends a notice of assessment. It should be noted that the payment can be delayed if your tax return is selected for a detailed review.

Updating Information for CWB

If you need to update your personal or financial information, it can be done by contacting the Canada Revenue Agency. Accurate information is vital to ensure you receive the correct CWB payment you’re entitled to. Address change, marital status change, and account modifications are some of the details which could affect your CWB payment.