What’s the new Personal Support Workers Tax Credit?
Canada’s Budget 2025 proposes the introduction of a temporary five-year refundable tax credit for eligible personal support workers (PSWs), equal to 5% of eligible employment earnings, up to $1,100/year. It applies for tax years 2026 to 2030, focused on those in provinces or territories not already covered by bilateral wage-increase agreements. (budget.canada.ca)
Eligible earnings must be from work in regulated health or care-establishments and the worker must provide one-on-one care for daily living, mobilization, etc. (budget.canada.ca)
What’s important for Digital Nomads?
Digital nomads often cross borders, earning remotely or relocating. Key considerations:
- Residency for tax purposes: To claim Canadian tax credits, including this one, you typically need to be a resident for tax purposes. If you’re a nomad who becomes a non-resident, eligibility usually drops off.
- Provincial agreements: If you work in a PSW role, where you physically perform eligible work in Canada, check if your jurisdiction has a bilateral agreement. BC, Newfoundland & Labrador, and the Northwest Territories already have agreements, which exclude those provinces from needing the tax credit under federal provisions. (budget.canada.ca)
- Remote work from abroad: Working remotely from another country might not count; earnings abroad likely not eligible. Physical presence may be required in the eligible health establishment and regulated care settings.
Practical Steps & Examples
| Scenario | Could you claim the PSW Tax Credit? |
|---|---|
| You are living in Toronto, working in a nursing home starting 2027 | Yes, Ontario isn’t in the excluded list—if your work meets duties and eligible earnings criteria. |
| You work remotely for a Canadian health care firm from Thailand | No, physical presence in eligible care establishment in Canada required. |
| You are a nomad who spends 6 months in BC earning PSW hours | No, BC has bilateral agreement; credit does not apply there. |
Actionable Insights for Digital Nomads
- If relocating or working in Canada, ensure your PSW work is recognized by a regulated health care establishment.
- Track residency status carefully; maintain documentation showing periods of physical presence.
- Determine if you're in an excluded province/territory to assess eligibility.
- Retain records of eligible earnings, employer certifications, and duties performed in case CRA requests proof.
Why this matters
This tax credit reflects Canada’s intent to support front-line care workers amid labor shortages. For digital nomads considering care work in Canada, or those moving temporarily, it’s a potential source of income support, but only if conditions of work and residency are met.
Bottom line: If you’re a digital nomad considering health care work in Canada, this tax credit offers value—but only under specific geography and work conditions. Plan carefully to see if you can access it.