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Working income tax benefit (WITB)

*Technical question

Currently, if max CCA is used (Asset: subcontractors truck) - it will result in taxable income - $3,950.70 producing WITB - $237.00

CALC
$3,950.70 (WORKING INCOME) - $3,000.00 (BASE AMOUNT) = $950.70
RATE 25% WITB = $950.70*25% = $237.00

However, if less CCA used – eg. $8,000 vs $11,653 ($3,653 less) – working income is now $7,600.00 creating WITB $1,043.00 (max amount)

Looks like win-win (less CCA used & more WITB) but want to make sure it’s correct/right. (Want to make sure rules are followed and everything is by the book)

Would anyone like to share thoughts? (Thanks Kindly)

Yes, it works like that.

One also might evaluate whether the WITB is worth using up CCA if a client is under their basic personal exemption for the year. Some clients may want their working income closer to 12,000.

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WITB is one of the few programs where, under the right setting, a higher income can equal a larger gov’t payment.

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