Working income tax benefit (WITB)

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1

*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)

2

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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