Low income individuals will be eligible for a refundable Working Income Tax Benefit (WITB) tax credit in 2007. You must be at least 19 years of age at the end of 2007 to qualify.
The refundable tax credit is available on earned income exceeding $3,000 at a rate of 20 per cent to a maximum tax credit of $500 for individuals and $1,000 for families.
The credit is reduced by 15 per cent of income in excess of $9,500 for individuals ($14,500 for families), and declines to zero at an income level of $12,833 for individuals ($21,167 for families).
The credit is not available to students, who have no dependent children, and are enrolled on a full-time basis for more than 3 months in the year.
Beginning in 2008, you may be eligible to apply for an advance of up to 50 per cent of the WITB you expect to receive for 2008. You should apply for the advance using Form RC201 between January 1 and August 31, 2008. Only calculated advance amounts totaling at least $100 will be paid out. Depending on the date of application, the eligible advance payment will be allocated to the remaining scheduled payments dates as follows: April 4, 2008, July 4, 2008, October 3, 2008, and January 5, 2009.
Information for Tax Tips is provided as a public service by the Chartered Accountants of British Columbia.