New PSW Tax Credit in Canada: Eligible Personal Support Workers Can Receive Up to $1,100 Per Year
Canada’s healthcare workers play a critical role in supporting seniors, individuals with disabilities, and patients who require daily assistance. To recognize their contributions, the Government of Canada has introduced a new Personal Support Workers Tax Credit (PSW Tax Credit), providing eligible workers with up to $1,100 annually from 2026 to 2030.
If you are a Personal Support Worker (PSW), Préposé aux bénéficiaires (PAB), Home Support Worker, Care Aide, or work in a similar healthcare support role, this new tax credit could put more money back into your pocket.
What Is the New PSW Tax Credit?
The Personal Support Workers Tax Credit is a refundable federal tax credit introduced under Budget 2025. Eligible workers can claim 5% of their eligible employment income, up to a maximum annual benefit of $1,100.
Because the credit is refundable, eligible workers may receive the benefit even if they owe little or no income tax.
The credit will be available for taxation years 2026 through 2030.
How Much Can You Receive?
The credit is calculated as:
5% × Eligible Employment Income
Maximum annual credit: $1,100
Examples:
• If you earn $20,000 in eligible income, your credit could be $1,000.
• If you earn $50,000 in eligible income, your credit would be capped at $1,100.
Who Qualifies?
To qualify, an individual must generally:
• Work as a Personal Support Worker or similar healthcare support professional.
• Provide direct one-on-one care and essential support to patients.
• Assist individuals with activities of daily living, mobility, safety, comfort, and well-being.
• Work in an eligible healthcare establishment such as:
- Hospitals
- Nursing homes
- Long-term care facilities
- Residential care facilities
- Community care facilities
- Home healthcare organizations
Your employer must certify your eligible earnings and employment status.
Eligible Provinces and Territories
Workers in the following provinces and territories are expected to qualify:
• Alberta
• Saskatchewan
• Manitoba
• Ontario
• Quebec
• New Brunswick
• Nova Scotia
• Prince Edward Island
• Yukon
• Nunavut
Provinces and Territories Currently Excluded
The federal government has excluded the following jurisdictions because they already receive separate federal funding agreements aimed at increasing PSW wages:
• British Columbia
• Newfoundland and Labrador
• Northwest Territories
How to Claim the PSW Tax Credit
You do not need to submit a separate application.
To claim the credit:
- Work in an eligible position during the year.
- Obtain employer certification of your eligible earnings.
- File your personal income tax return.
- Complete the applicable CRA tax form when filing your return.
The first claims will be made when filing 2026 tax returns in spring 2027.
Why This Tax Credit Matters
Canada continues to face healthcare staffing shortages, particularly in long-term care and home care services. Personal Support Workers are essential to the healthcare system, yet many earn modest wages despite performing physically and emotionally demanding work.
The new PSW Tax Credit provides direct financial support to eligible workers and recognizes the important role they play in caring for Canadians.
Need Help With Your Taxes?
Understanding new tax credits and claiming all available benefits can be confusing. A professional tax review can help ensure you receive every credit and deduction you qualify for.
Contact Unity Financial Services for assistance with personal tax returns, tax planning, and government benefits.
Phone: 438-701-3770