Advance canada workers benefit payments

What if you received “Advance Canada workers benefit payments” but don’t qualify on your 2023 Tax Return. The payments were given out automatically as of July 2023 and were based on your 2022 Tax Return.
I know that you report on line 41500 the amount from slip RC210…but what happens if your CWB on your 2023 Tax Return is lower than what you received in advances…
Calculations on the 2023 Tax Return seem to only insert on line 41500 to the extent that you have an amount on line 45300; but what happens if you have no amount on line 45300 or it is lower than line 41500…will this difference need to pay repaid to CRA?

I have a similar example. The client qualified for the CWB in 2022 and received the ACWB. This tax year 2023 he does not qualify for CWB because his income is substantially higher and the ACWB (RC210 amount in box 10) appears to be an information box on Line 38120 on the Schedule 6 because it is not applied to the net federal tax (line 41500).

It will be administered like the GST program. The return will be filed and after that a AWCB statement will be sent for that year showing any under or overpayments and amounts owing back. Amounts owing will then get benefits and refunds applied to them as they come up.

The link is here but it was a little weird in the wording so I looked up a client’s account under their Benefits & Credits section in their CRA to see how they are handling it, and confirmed it’s just like the other quarterly programs. :slight_smile:

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So why did CRA have to make unnecessary changes again…people who were used to having a lump sum will be unhappy…and the others that received the payments but now don’t qualify will have a CRA debt…then we’ll be stuck trying to explain it to the affected clients.

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The same reason they pulled the climate incentive payments out of the return and made it a quarterly program : to make it look like they are doing more for taxpayers while actually costing everyone money to administer these stupid programs.

Here’s more money! Just kidding, you didn’t qualify. Feels like a ton of “make busy” projects.

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This! I am now going to get several low income clients that will be upset on why are their refunds are much lower than previous years. For instance the CAIP change, I had several people who complained to us about it. Now it looks like I’ll have to advise my clients to not spend their CWB money and instead just transfer it to a savings account. I’m already having to respond to several emails about this so it’s quite ridiculous and frustrating at the same time.

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Couldn’t agree more. CRA never ceases to amaze me with their stupidity, from review managers who don’t know their own rules to unnecessary programs, to impossible deadlines. I’ve never subscribed to “government is out to get us” lines of thought but they sure have no interest in making life easier for anyone these days.

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Wondering if @taxcycle could add a paragraph in the letter or something else to show the benefit that they’ll have to repay if the 2023 CWB is not enough to cover the advance payment that they received.

To clarify, you will see that in the case where the advanced payment of CWB exceeds the credit calculated on Schedule 6, the repayment amount calculated at the bottom of Schedule 6 will be the lesser of the advanced payments and the credit for the year.
This is because the advanced payment amount is considered to be the minimum entitlement for the year per subsection 117(2.1).

From the Explanatory notes for the Ways and Means Motion related to Bill C-47:
“Subsection (2.1) is amended to ensure that the lesser of (a) an individual’s entitlement to the
Canada Workers Benefit (CWB) under subsections 122.7(2) and (3), and (b) the advance CWB
payments received by the individual (and, under specific circumstances, their cohabiting spouse
or common-law partner) in respect of a taxation year under section 122.72, is to be included in
the individual’s tax payable under Part I of the Act for that taxation year.”

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Hi paul;
If your Advance Canada Workers Benefit (ACWB) payments in 2023 exceed your actual entitlement on your 2023 tax return, the difference will need to be repaid. The ACWB payments (from slip RC210) are reported on line 41500, and your actual CWB credit is calculated on line 45300. If line 45300 is lower than line 41500 (or zero), the excess will reduce your refund or increase your tax payable to the CRA.

The last time I was reading the instructions about these advance payments it said explicitly that if they over paid you the excess would not have to be paid back. I took that as the reason they only pay out half of the previous year’s calculation as a bit of a hedge against the calculation being lower than the year before. That was last year however so they may have changed it. As I note they put the prepayment in above the current year calculation when they are totaling up how much you have to pay them/get back I am not certain how they manage that unless the amount prepaid has a limiter built into it that it can not be more than the amount calculated for the current year. Which I haven’t tested as the two clients I ran into that had it last year had higher current year calculations than prepayments.

@paymentsdate This is incorrect. If the ACWB payments exceed the CWB calculated for the year, you do not have to repay the difference. The only time you may have to repay ACWB payments is if you did not qualify for them when they were received.