Tax Planning
How to Maximize the Personal Support Workers Tax Credit (PSWTC) in Canada
Discover everything you need to know about the new refundable tax credit for PSWs—from eligibility to claiming it with real examples so you don’t leave money on the table.
By NomadicTax Research Team • 5-8 min read • July 19, 2026
## What is the PSWTC?
Beginning with the **2026 taxation year**, Canada introduces the **Personal Support Workers Tax Credit (PSWTC)**—a new **refundable tax credit** aimed at supporting workers employed in regulated health or home care settings. It allows eligible personal support workers (PSWs) to claim **5% of their working earnings**, up to a maximum of **$1,100 per year**. ([canada.ca](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2025-cra-information-select-measures.html?utm_source=openai))
## Who Qualifies?
You must:
- Be employed as a PSW in an **eligible health care establishment (HCE)**—this includes hospitals, nursing homes, home health agencies, residential facilities for elderly care, etc. ([canada.ca](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2025-cra-information-select-measures.html?utm_source=openai))
- Perform **one-on-one personal care and essential support duties**, such as assisting with mobility or daily living tasks, under the direction of a regulated healthcare professional. ([canada.ca](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2025-cra-information-select-measures.html?utm_source=openai))
- Be employed in a province or territory **other than** British Columbia, Newfoundland and Labrador, and the Northwest Territories (because these three jurisdictions have bilateral agreements with the federal government addressing PSW wages). ([canada.ca](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2025-cra-information-select-measures.html?utm_source=openai))
- Have your employer certify your eligible earnings on your **T4 slip** using the new “other information” code. ([canada.ca](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2025-cra-information-select-measures.html?utm_source=openai))
## How Much Can You Get?
- If you earn **$22,000/year** as a PSW: 5% × $22,000 = $1,100 → **full credit of $1,100**.
- If you earn **$15,000/year**, 5% × $15,000 = $750 → you get **$750**.
- If you earn **$30,000/year**, you'd normally calculate 5% × $30,000 = $1,500, but you are capped at **$1,100**.
## Claiming the PSWTC
To claim:
1. **File your tax return** for the year 2026 and onward.
2. Ensure your employer has certified eligible PSW earnings on your **T4 slip** with the appropriate code.
3. Attach any required documentation, especially if there’s ambiguity (e.g., your duties or employer's HCE status).
4. Because the credit is **refundable**, even if you owe no income tax, you may still receive the credit as a cheque or direct deposit.
## Real-World Example
“Jane” works as a PSW at a home health care agency in Ontario and earns **$28,000 in 2026**. Since she works in an eligible facility and performs qualifying duties, she multiplies her eligible earnings by 5% ⇒ that’s **$1,400**, but due to the cap, she can only claim **$1,100** on her income tax return. If her tax liability is $800, she receives the remaining $300 as a refundable benefit.
## Actionable Insights ✔
- Review your “duties of employment” and place of work to ensure **eligibility**.
- Talk to your employer to make sure they fill out the T4 slip with the **new other information code**.
- If you live in one of the three excluded jurisdictions, look into provincial PSW support—different rules may apply.
- Keep meticulous records of your earnings and duties—this makes certification easier, and speeds up processing if there are questions.
## Why It Matters
This credit helps a workforce that often undertakes demanding care work and may have modest income. For many, up to **$1,100 extra per year** can offset costs like commuting, training, or supplies—offering **real financial relief** where it matters. And because it’s refundable, **everyone who qualifies can benefit**, even if they pay little or no federal income tax.
With this credit now law—including through Budget 2025 measures—eligible PSWs should plan ahead so they can claim everything they deserve. ([canada.ca](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2025-cra-information-select-measures.html?utm_source=openai))