Understanding the PSW Federal Tax Credit: What You Need to Know

Great news for Personal Support Workers across most of Canada! The federal government has introduced a new tax credit specifically designed to recognize the essential work you do every day. While this isn't a permanent solution to fair wages—something the industry continues to advocate for—it does provide some welcome financial relief for eligible PSWs.

Let's break down what this means for you and how you can benefit from it.

The Basics: How the PSW Tax Credit Works

This new tax credit is available for five years, running from 2025 through 2030. Eligible PSWs can claim up to 5% of their qualifying earnings, with a maximum benefit of $1,100 per year.

Here's the really good part: it's a refundable tax credit. This means even if you don't owe any taxes when you file, you'll still receive this money back. It's designed to put money directly in your pocket.

Your employer plays an important role in this process. They'll need to confirm your eligibility and submit the appropriate documentation to the Canada Revenue Agency (CRA). If you work for multiple employers, each one will need to verify your eligible earnings from their organization.

Am I Eligible for This Tax Credit?

To qualify for the PSW tax credit, you need to meet several criteria. You must be a healthcare worker who provides one-on-one care and support to help individuals maintain their health, well-being, safety, and comfort. Your care should be provided under the direction of a regulated healthcare professional or provincial community health organization.

Your main job duties should include assisting patients with activities of daily living and helping with mobility. You also need to work in an eligible setting, such as a hospital, nursing home, residential care facility, community care facility for seniors, home healthcare establishment, or similar regulated healthcare facility.

Of course, you'll need to have filed your taxes to receive the credit.

What If My Job Title Is Different?

Don't worry if your official job title isn't exactly "Personal Support Worker." If your duties match the description above and your employer confirms your eligible earnings, you should qualify for the credit.

Related positions like Health Care Assistants (HCAs), Home Support Workers (HSWs), and Continuing Care Assistants (CCAs) are typically grouped together with PSWs by Statistics Canada and other agencies. As long as you meet the eligibility criteria, your specific job title shouldn't prevent you from claiming the credit.

Understanding Eligible Earnings

Your eligible earnings include your taxable employment income—things like wages, salaries, benefits, overtime pay, and shift premiums—earned while working at an eligible healthcare facility. This also covers taxable benefits related to your PSW employment and any tax-exempt income earned on a reserve.

Here's a quick example to help you understand the potential benefit: If you earned $18,000 in eligible income, you could receive a $900 tax credit. If you earned $22,000 or more in eligible earnings, you'd receive the maximum credit of $1,100.

Keep in mind that income from non-PSW jobs, unregulated facilities, private cash-based care arrangements, or self-employment unrelated to regulated PSW duties won't count toward your eligible earnings.

Important Geographic Exceptions

If you work in British Columbia, Newfoundland and Labrador, or the Northwest Territories, you won't be eligible for this tax credit. These three regions have already signed separate agreements with the federal government to receive funding for permanent wage increases for PSWs—which is actually a better long-term solution.

This tax credit was created as an alternative way to support PSWs in provinces and territories that haven't yet negotiated these wage increase agreements.

Looking Ahead

While this tax credit provides helpful short-term financial support, advocacy continues for permanent wage increases that truly reflect the vital work Personal Support Workers do every day. In the meantime, make sure to speak with your employer about confirming your eligibility and keep good records of your employment for tax filing purposes.

Your work makes a real difference in people's lives, and this credit is one small step toward better recognition and compensation for your dedication.

For more helpful resources and information for Personal Support Workers, visit our Personal Support Worker Resource Directory.