Who is Getting the Working Income Tax Benefit?

April's husband died last year.  She was employed, but took time off to nurse him while he was ill and then took several months to recover after his death before returning to work.  Even with her EI benefits, the CPP death benefit, and CPP survivor benefits, her income was low enough to qualify for the WITB of about $400.

It may be a sign of the state of our economy over the past year, but a surprising number of clients seem to be qualifying for the Working Income Tax Benefit.  Just last week, an experienced tax preparer filed three claims for the WITB.  Here are some other examples of who qualified (names changed to protect the taxpayers).

Bob graduated high school in 2009 and was only able to find part time work throughout 2010.  With only earning $12,000 from employment in 2010, he qualified for a WITB of over $1,000.

Susan was working in retail in northern BC and could no longer afford the costs of living in the far north so she sold her home and moved further south.  She was able to continue working for the same retail chain but after claiming her moving expenses, her net income was reduced so much that she was eligible for over $1,000 in WITB.

Although the WITB was enacted to provide tax relief to low-income individuals and families, and to provide incentive for Canadians to enter the workforce, it seems to be hitting a much larger target.  Here is a summary of the eligibility requirements:

A resident of Canada age 19 or older is eligible for the WITB if he earned income from employment or business or taxable scholarship or research grant income in excess of $3000. Income for individuals without eligible dependents is capped at $16,770, and for families the cutoff is $25,854. A resident younger than 19 living with a spouse or common-law partner and/or his child may qualify for the WITB.

There are additional criteria. Students without eligible dependents who are enrolled for more than 13 full-time weeks in 2010 are not eligible for the WITB. People who are exempt from tax for a period, such as diplomats and their families and/or employees, do not qualify. A resident who spent more than 90 consecutive days in prison is unable to receive the WITB as well.

There is a Disability Supplement available for individuals who qualify for the WITB and the Disability Tax Credit.

Maximum amounts available will vary. Some provinces and territories have added additional requirements for WITB eligibility. Residents of Alberta, British Columbia, Nunavut and Quebec have implemented provincial reconfigurations that affect this benefit.

ADDITIONAL EDUCATIONAL RESOURCES: EverGreen Explanatory Notes