Low-Income Workers Tax Credit

About the Low-Income Workers Tax Credit

The Low-Income Workers Tax Credit (known as Low-income Individuals and Families (LIFT) Tax Credit) provides up to $850 each year in Ontario personal income tax relief to low-income workers, including those earning minimum wage.

It is a non-refundable tax credit that you can use to reduce or eliminate your Ontario personal income tax, excluding the Ontario Health Premium.

Eligible Ontario tax filers can claim the Low-Income Workers Tax Credit when they file their 2020 tax return in 2021.

Who is eligible

Low-income tax filers, including those earning minimum wage, can claim the Low-Income Workers Tax Credit.

To qualify:

• you must be a Canadian resident in any province or territory at the start of the tax year
• you must be an Ontario resident by the end of the tax year
• you must have employment income
• you must owe Ontario personal income tax
• your individual adjusted net income for the year must be below $38,500
• your adjusted family net income for the year must be below $68,500
• you must not have spent more than six months in prison during the year

How to claim it

The Low-Income Workers Tax Credit is effective January 1, 2019. You can claim it each year when you file your tax return. On the tax return it is called the Low-income Individuals and Families Tax Credit.

How it is calculated

The maximum Low-Income Workers Tax Credit you can receive is $850 or 5.05% of your employment income, whichever is lower.

This maximum amount is then reduced by 10% of the greater of your:

• adjusted individual net income over $30,000
• adjusted family net income over $60,000

You may receive a reduced credit if your:

• individual adjusted net income is between $30,000 and $38,500
• adjusted family net income is between $60,000 and $68,500

A single person who works full time at minimum wage (earning nearly $30,000) with no other income will:

• receive $850 in tax relief
• pay no Ontario personal income tax

Those who earn more than $30,000 will receive less than $850 or no tax relief from this credit.

Questions

If you have questions about the Low-Income Workers Tax Credit, please contact the Canada Revenue Agency:

• in person at a tax services office or tax centre
• by phone, at 1-800-959-8281