I am bit lost at how CWB work. Here is an example: T1 2022 tax Payable = $1698 CWB = 1531 Owing = 167.45 Doesn’t this mean the CWB has been fully used to deduct the tax payable? Why does the client still receive ACWB in the amount of 765.5 or 1/2 of the previous CWB in 2023??

In 2022 it was only a refundable credit claimed on the T1. In 2023, they started to pay it out quarterly (in advance), to those who CRA expected would otherwise claim it on their 2023 T1. For 2023, those recipients will get a RC210 slip stating the amount of ACWB they received. They may still qualify for more CWB than they received, and that is calculated on the T1 (S6).

You will also find that if the client qualifies for the CWB in 2023 any AWB received during 2023 as evidenced by the RC210 is added as income tax payable on line 41500 on schedule 1 of the 2023 T1 return. This essentially reduces the clients 2023 refund by the amount of the AWB or increases their amount owing. See step 4 of Schedule 6. Whether this is a quirk or not… If you qualified for the CWB in 2022 and received that as part of your 2022 refund your 2023 AWB payments total 50% of that CWB. However, if you don’t actually qualify for the CWB when you file your 2023 T1 return you do not need to repay the AWB. Instead of the amount from the RC210 showing up on line 41500 of the 2023 T1 return that entry becomes zero as calculated in Step 4 of Schedule 6. It seems that if you don’t qualify for the CWB in 2023 the RC210 is essentially meaningless. If you qualify for the Canada Workers Benefit (CWB) in 2023 they will deduct any advanced payments you received (AWB) on the RC210. However, if your income is too high to qualify for the 2023 CWB then you just get to keep any AWB you received. It doesn’t get deducted from your refund.

dang, you are right. I just tested it. So if you are not qualified for CWB in 2023, then you got free money from RC210. But I dont see any deduction in the CWB in their Refundable Tax Credits in 2023 if they are indeed qualified for CWB. I think they still get the amount of credits calculated in 2023, but they just need to pay tax on the RC210. So if this is how CRA do it, I think it is quite fair. Many people, tax preparers included, think that CRA would demand a pay back of AWCB if the clients are not eligible for CWB.

As a reference as to why there is no repayment required, see my note at the bottom of this item: [image] Advance canada workers benefit payments Tax Topics 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.

[image] CalgaryTax91: I think they still get the amount of credits calculated in 2023, but they just need to pay tax on the RC210. No, they don’t pay tax on the RC210 that entire amount gets added to income tax payable, so the entire amount gets deducted from their tax refund to a maximum of the CWB calculated. Essentially speaking the 2023 CWB is decreased by the advanced payments received on the RC210. Allen provided the technical explanation in his link. :slightly_smiling_face:

Ok gotcha. that makes perfect sense now!!! Thanks for the clarification!!!

Advanced Canada Worker Benefit

Tax Topics

Allen March 22, 2024, 5:30pm 5

As a reference as to why there is no repayment required, see my note at the bottom of this item:

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CWB issue Tax Topics	5	183	March 13, 2025
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RC210 Advanced Canada Workers Benefit statement - diagnostic Tax Topics	4	568	March 27, 2024
Choice of CWB inclusion on T90 Tax Topics	4	506	March 22, 2026

Advanced Canada Worker Benefit

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