The PSW Tax Credit is a temporary, refundable tax credit designed to support personal support workers, providing up to $1,100 per year based on eligible earnings from 2026 to 2030.

Overview of the PSW Tax Credit

The Personal Support Workers Tax Credit is a new initiative introduced in Budget 2025, aimed at recognizing the essential role of personal support workers (PSWs) in the healthcare system. This credit is designed to provide direct financial support to eligible PSWs, acknowledging their contributions to patient care and well-being.

Key Features

  • Credit Amount: The tax credit is equal to 5% of eligible earnings, with a maximum benefit of $1,100 per year. This means that if a PSW earns $22,000 or more, they will receive the full credit amount. If they earn less, they will receive 5% of their total earnings.
  • Eligibility Period: The credit applies to earnings from 2026 to 2030, with claims opening in the 2027 tax filing season.

Eligibility Criteria

To qualify for the PSW Tax Credit, individuals must meet the following conditions:

  • Employment Role: The individual must work as a personal support worker in an eligible healthcare establishment, providing one-on-one care and essential support to optimize the health and comfort of individuals.
  • Main Duties: Duties must include assisting with activities of daily living and mobilization, as directed by a regulated healthcare professional.
  • Eligible Establishments: PSWs must be employed by regulated healthcare facilities such as hospitals, nursing homes, or home health care agencies. However, PSWs in British Columbia, Newfoundland and Labrador, and the Northwest Territories are ineligible due to existing agreements for wage increases in those regions.

How to Claim the Credit

  • Employer Certification: Employers must certify the PSW’s eligible earnings and submit a specific form to the Canada Revenue Agency (CRA).
  • Filing Taxes: When filing taxes, eligible PSWs will need to include the PSW Tax Credit section in their income tax return, detailing their eligible earnings and employer certification.

Conclusion

The PSW Tax Credit is a significant step towards providing financial relief to personal support workers, recognizing their vital role in healthcare. Eligible workers should ensure they understand the requirements and process for claiming this credit to benefit from the support it offers. For more detailed information, PSWs can refer to official resources or consult with their employers regarding eligibility and claiming procedures.