Tax Filing Assistance

PSW Tax Credit 2026: How to Claim $1,100 in Ontario

By May 26, 2026 No Comments
PSW tax creditPSW tax credit
This article is for informational purposes only and does not constitute tax or financial advice. Consult a qualified accounting professional before making any tax or financial decisions.

— Quick answer: claiming the PSW tax credit on your 2026 return

The Personal Support Workers Tax Credit (PSWTC) is a refundable federal tax credit equal to 5% of your eligible PSW earnings, up to a maximum of $1,100 per year. To claim it on your 2026 tax return, your employer must first certify your eligible earnings using a new CRA "other information" code on your T4 slip. You then enter the certified amount on the new PSWTC line of your T1 personal return and file by April 30, 2027. The credit is refundable, so you receive the money as part of your refund even if you owe no income tax, and it is available to PSWs at eligible health care establishments in every province and territory except British Columbia, Newfoundland and Labrador, and the Northwest Territories.

— What changed: a $1,100 credit that finally puts cash back in PSW pockets

For thousands of Ontario personal support workers, a long bus ride home from a 12-hour shift can feel like its own job. The pay is modest, the hours are unforgiving, and the recognition has too often arrived in words rather than dollars.

That is starting to change. Under Bill C-15, the Budget 2025 Implementation Act that received Royal Assent on March 26, 2026, the federal government created the Personal Support Workers Tax Credit, a refundable credit (one that pays out even if you owe no income tax) worth up to $1,100 per year. The credit runs from the 2026 tax year through 2030 and applies to Ontario PSWs at long-term care homes, hospitals, retirement residences, and home-care agencies.

This guide walks through who qualifies and how to claim it. For wider context on the budget, see our Canada Federal Budget 2025 insights.

$1,100Maximum credit per year
5%Of eligible PSW earnings
5 yrsProgram window 2026–2030
10 of 13Eligible jurisdictions

— Quick start: pick your path

Your next step depends on your situation. If you are a PSW employee with one T4, jump to the step-by-step section. If you have multiple employers, work outside Ontario in BC, NL, or NWT, or run your own care service as a self-employed contractor, the list below points you to the section you actually need.

Choose the path that matches your situation:

  • →Employees with one Ontario PSW employer: start with the step-by-step section below.
  • →Workers with two or more Ontario PSW employers: see the multi-employer note in the step-by-step section.
  • →Payroll administrators at an Ontario LTC home, hospital, or home-care agency: read the T4 certification subsection and our employer-prep guide.
  • →PSWs working in British Columbia, Newfoundland and Labrador, or the Northwest Territories: see the province-by-province table; the PSWTC does not apply, but provincial wage top-ups likely do.
  • →Self-employed PSWs contracted directly by a family: see the eligibility section below; most direct-hire arrangements may not currently qualify.

— Who counts as an "eligible personal support worker"

To qualify, you must perform PSW duties at an eligible health care establishment, provide one-on-one care, and have main duties that include assisting clients with daily-living activities and mobility. The role is defined in section 122.93 of the Income Tax Act.

The Income Tax Act now sets three tests.

First, your employer must be an "eligible health care establishment." The statute names hospitals, nursing care facilities, residential care facilities, community care facilities for the elderly, home health care establishments, and similar regulated facilities. In Ontario, that captures most PSW workplaces, including long-term care homes, regulated retirement homes, and Ontario Health home-care contractors.

Second, your day-to-day work must consist of one-on-one care that helps the client maintain health, safety, autonomy, and comfort, under the direction of a regulated health professional or a provincial health body.

Third, your main duties must include assisting with activities of daily living and mobilization, such as bathing, dressing, feeding, and transfers.

Your job title does not have to read "Personal Support Worker." Health Care Aides, Continuing Care Assistants, and similar roles that meet the three tests above may also qualify.

— Where the credit applies (and where it doesn’t): a province-by-province table

The PSWTC is a federal credit, but it does not apply uniformly across Canada. Three jurisdictions are excluded: British Columbia, Newfoundland and Labrador, and the Northwest Territories. They signed separate bilateral agreements with the federal government to fund direct PSW wage increases instead. The funding exists; it simply flows through a provincial wage top-up rather than the federal credit.

PSWs in Ontario, and in every other province and territory, claim the credit through their personal income tax return.

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Where the PSWTC applies in 2026

10 of 13 Canadian jurisdictions allow PSWs to claim the federal credit. British Columbia, Newfoundland and Labrador, and the Northwest Territories receive direct provincial wage funding instead.

10
Eligible jurisdictions
3
Excluded jurisdictions
Yes
Ontario is eligible
Source: Department of Finance Canada, Budget 2025 — PSWTC bilateral agreement framework; Canada Revenue Agency, Budget 2025 select measures. ClearWealth Accounting Advisors · clearwealth.tax · For informational purposes only.

The test the CRA applies is where the PSW duties were performed, not where you live. If you live in Ontario but performed PSW duties for an employer based in an excluded province, those specific hours do not count toward your yearly eligible remuneration. Ontario PSWs who split shifts across provinces should keep a clean record of which shifts happened where throughout the year.

— How the $1,100 is calculated, with two Ontario examples

Take your yearly eligible PSW earnings, multiply by 5 percent, and cap the result at $1,100. If you earn $22,000 or more in eligible PSW remuneration during the year, you receive the full $1,100. Below that, you receive 5 percent of whatever you earned.

Because the PSWTC is a refundable credit (a credit that pays out even when no tax is owing, as our Canadian federal income tax overview explains in more detail), the calculated amount lands in your refund or reduces the balance you owe.

Two everyday Ontario examples make it concrete.

Maria is a full-time PSW at a long-term care home in Mississauga. Her 2026 T4 shows $42,000 in certified eligible earnings. Five percent of $42,000 is $2,100, but the credit is capped, so Maria claims the full $1,100.

David works part-time for a home-care agency in Hamilton. His 2026 T4 shows $18,000 in certified eligible earnings. Five percent of $18,000 is $900, which sits below the cap, so David claims $900.

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How your PSWTC grows with eligible earnings

The credit equals 5% of yearly eligible PSW earnings, capped at $1,100. Once earnings reach $22,000, the credit plateaus for the rest of the year.

5%
Of eligible earnings
$1,100
Maximum credit
$22,000
Cap reached at
Source: Canada Revenue Agency — Budget 2025: CRA Information on Select Measures (PSWTC); Income Tax Act, section 122.93. ClearWealth Accounting Advisors · clearwealth.tax · For informational purposes only.

The $1,100 cap is non-indexed, meaning it will not rise with inflation over the five-year program window.

— Step-by-step: how to claim the PSWTC on your 2026 T1

Claiming the PSWTC takes five steps: confirm your T4 shows the PSWTC certification, collect every T4 if you had multiple employers, enter the certified eligible earnings on the new PSWTC line of your T1, file by April 30, 2027, and keep your T4s for six years.

Here is the practical timeline from January 2027 through your refund deposit.

  1. 1
    Confirm your T4 carries the PSWTC certificationOnce your employer issues your 2026 T4, typically by the end of February 2027, check the "other information" section for the new CRA-prescribed PSWTC code with the dollar amount of your eligible PSW earnings. Contact payroll before filing if the code is missing.
  2. 2
    Collect a T4 from every PSW employerEach employer must certify your eligible earnings on its own slip. The CRA then combines the certified amounts and applies the credit, capped at $1,100 across all your PSW work.
  3. 3
    Enter the certified earnings on the new PSWTC line of your T1The CRA will publish the specific line number with the 2026 tax forms, and most tax software will prompt you for it directly.
  4. 4
    File your T1 by April 30, 2027 — even if you owe no taxThe PSWTC is refundable, but you must file a return to receive it. PSWs who skip filing leave the credit unclaimed.
  5. 5
    Set up CRA direct depositRefunds typically arrive within two to eight weeks of filing. Keep your T4s and pay stubs for six years in case the CRA requests them.

— What your employer needs to put on your T4

If you are an employer (a long-term care operator, hospital payroll team, or home-care agency), you carry the certification responsibility for your PSW staff. The credit cannot be claimed without an employer-certified amount on the T4 slip, which means your payroll process needs a small but specific update for 2026.

Your payroll administrator must populate the new CRA-prescribed "other information" code on each eligible PSW’s T4 with the dollar amount of yearly eligible remuneration, defined as employment income earned performing eligible PSW duties at your eligible health care establishment during 2026. Overtime, shift premiums, and taxable benefits tied to that PSW employment are generally included.

For a wider look at 2026 payroll readiness, see our guide on how employers must prepare for Budget 2025. Failing to certify leaves your team frustrated and shorted; the credit belongs to the workers.

— Common mistakes that delay or shrink your PSWTC refund

The most common PSWTC errors are simple: not filing a return because no tax is owing, claiming 2025 earnings, missing a T4 from a second employer, or including non-PSW income in the eligible-earnings figure. Each of these is fixable before you file.
  • →Assuming the PSWTC arrives automatically and skipping the tax return because no tax is owing. This is the single most common error and leaves the credit unclaimed.
  • →Claiming PSW hours worked in British Columbia, Newfoundland and Labrador, or the Northwest Territories. Those duties are excluded from yearly eligible remuneration.
  • →Including non-PSW employment income in the certified earnings figure. Only income from eligible PSW duties at an eligible health care establishment counts.
  • →Waiting for the employer to file the credit for you. The PSWTC is claimed by the worker on their own T1 return.
  • →Missing one T4 when you worked for multiple PSW employers. Each employer certifies its own portion separately and the CRA combines them.
  • →Trying to claim 2025 PSW earnings. Only the 2026 through 2030 tax years qualify; earlier years are out of scope.
  • →Forgetting to set up CRA direct deposit, which typically adds one to three weeks to refund delivery compared with a mailed cheque.

— PSWTC FAQ

Do I qualify for the PSW tax credit if I only work part-time?

Yes. The credit is 5 percent of your eligible PSW earnings with no minimum-hours rule, capped at $1,100.

What if my employer doesn't add the new PSW code on my T4?

Ask payroll to reissue a corrected T4 before you file. Without that certification you cannot claim the credit.

I work for two home-care agencies — can I still claim the credit?

Yes. Each employer certifies on its own T4; the CRA combines the totals before applying 5 percent, capped at $1,100.

Do I need to apply separately or is the credit automatic when I file?

There is no separate application. You claim it on the new PSWTC line of your T1 using your T4 certified amount.

I earned less than $22,000 last year — do I still get something?

Yes. You receive 5 percent of whatever you earned in eligible PSW work. On $15,000, that is a $750 credit.

Why don't PSWs in BC, Newfoundland, or the Northwest Territories qualify?

Those provinces signed bilateral agreements with Ottawa for direct PSW wage increases. The support flows through a provincial top-up instead.

Is the $1,100 PSW tax credit considered taxable income?

No. The PSWTC is a refundable credit, not employment income, and it does not add to your taxable income.

When will I actually get the money in my bank account?

Refunds typically arrive within two to eight weeks of filing with CRA direct deposit. Mailed cheques can take longer.

For more Canadian tax guidance, browse our tax insights blog.

ClearWealth Accounting Advisors

PSWTC five-year filing timeline (2026–2030)

Each tax year of eligible PSW earnings is claimed separately on the T1 return filed the following April 30. The program covers five tax years, then expires.

5
Eligible tax years
Apr 30, 2027
First claim deadline
Apr 30, 2031
Final claim deadline
Source: Budget 2025 — Notice of Ways and Means Motion (PSWTC, section 122.93); Canada Revenue Agency, T1 personal income tax filing deadlines. ClearWealth Accounting Advisors · clearwealth.tax · For informational purposes only.

Need help claiming the PSWTC?

Our team can verify your T4 certification, calculate your eligible earnings, and file your 2026 return.

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This article is for informational purposes only and does not constitute tax or financial advice. Consult a qualified accounting professional before making any tax or financial decisions.

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