New Personal Support Workers Tax Credit in Canada: Complete 2026-2030 Guide

Recognizing Canada’s Personal Support Workers Through Tax Relief

Budget 2025 introduces a transformative new tax measure specifically designed to recognize and support personal support workers (PSWs), among the most essential yet lowest-compensated professionals in Canada’s healthcare system. The Personal Support Workers Tax Credit provides eligible PSWs with a refundable tax credit worth up to one thousand one hundred dollars annually, delivering meaningful financial relief to over two hundred thousand healthcare workers across Canada.

This groundbreaking measure reflects the government’s commitment to improving affordability for personal support workers while recognizing their vital contributions to Canadian society. As Canada’s population ages and demand for long-term care and home support services increases dramatically, PSWs face economic hardship despite performing essential work caring for seniors, people with disabilities, and those requiring assistance with activities of daily living.

The Personal Support Workers Tax Credit applies for the 2026 through 2030 taxation years, representing a temporary five-year commitment to supporting this critical workforce. This comprehensive guide explains who qualifies for this credit, how to claim it, how much support it provides, the role PSWs play in Canada’s healthcare system, and the broader context of healthcare workforce support.

Who Are Personal Support Workers? Role and Importance in Canadian Healthcare

Defining Personal Support Workers

Personal support workers are trained healthcare professionals who provide direct care to individuals requiring assistance with activities of daily living (ADLs) and maintain overall health, well-being, safety, and autonomy. While nurse practitioners and registered nurses provide clinical healthcare services, PSWs provide the essential day-to-day support that allows people to maintain dignity, independence, and quality of life.

Personal support workers:

Assist with Activities of Daily Living: Help individuals with bathing, dressing, grooming, toileting, mobility, and personal hygiene. These essential services maintain physical health and dignity for individuals unable to care for themselves independently.

Provide Mobility Support: Assist seniors and individuals with mobility impairments in safe movement, ambulation, transferring from beds to chairs, and other physical activities. Many PSWs receive specialized training in safe lifting techniques and mobility assistance.

Prepare Meals and Provide Nutrition Support: Plan, prepare, and serve meals appropriate to specific health needs and dietary requirements. PSWs may also assist with feeding for individuals with limited mobility or swallowing difficulties.

Provide Medication Support: While registered nurses administer medications, PSWs often assist clients in taking medications as prescribed, remind clients about medication schedules, and report any medication-related concerns to healthcare professionals.

Offer Emotional Support and Companionship: Spend extended time with clients, providing emotional support, social connection, and companionship. For seniors and isolated individuals, this social connection is often as important as physical care.

Maintain Safe Environments: Assess fall risks, suggest home modifications, ensure safe lighting and pathways, and monitor for potential hazards. Many PSWs identify safety concerns that prevent injuries.

Communicate with Healthcare Team: Report changes in client status, mood, behavior, or health to supervising nurses or physicians, ensuring comprehensive care coordination.

Provide Specialized Care: Assist with physical therapy exercises, wound care support under nursing supervision, and care for individuals with specific conditions like dementia or Parkinson’s disease.

Where PSWs Work

Personal support workers are employed across diverse healthcare and social care settings:

Home Care: Provide care in clients’ homes, often working independently with minimal direct supervision. Home care PSWs serve seniors aging in place, individuals recovering from surgery or illness, and people with disabilities preferring to live in their communities.

Long-Term Care Facilities: Work in nursing homes and residential care facilities providing twenty-four-hour care for seniors and individuals requiring constant assistance. In many facilities, PSWs comprise the majority of direct care staff.

Hospitals: Provide patient care support in acute care settings, assisting nurses with patient hygiene, mobility, feeding, and comfort. Hospital-based PSWs work in emergency departments, medical units, surgical units, and specialty clinics.

Community Care Facilities: Work in day programs, adult day centers, and community-based service agencies providing program support and care.

Private Households: Self-employed PSWs and those employed by individuals and families provide care in private residences.

PSWs as Healthcare Workforce Backbone

Despite being essential to healthcare delivery, personal support workers are often overlooked in healthcare workforce discussions dominated by physicians and nurses. The Canadian healthcare system relies substantially on PSWs:

• PSWs comprise the largest segment of direct care staff in long-term care facilities and home care agencies
• Many PSWs work multiple part-time or casual positions across different employers and settings
• PSW shortages directly limit healthcare system capacity, leading to reduced long-term care admissions and decreased home care availability
• PSW recruitment and retention challenges affect healthcare system efficiency and patient care quality

The COVID-19 pandemic starkly illustrated PSW importance. Working on the front lines, often with inadequate protective equipment, PSWs faced elevated infection risks while performing essential care duties. Public recognition of healthcare workers during the pandemic included significant attention to PSWs, who were lauded as heroes of the healthcare system.

The Personal Support Workers Tax Credit: Structure and Calculation

What Is the Personal Support Workers Tax Credit?

The Personal Support Workers Tax Credit is a refundable federal personal income tax credit introduced in Budget 2025 to provide direct financial support to eligible personal support workers. A refundable credit means that even if you have minimal or zero tax owing, you can receive the credit as a refund from the Canada Revenue Agency.

The credit equals five percent of your yearly eligible remuneration, with a maximum annual credit of one thousand one hundred dollars. This maximum is reached when yearly eligible remuneration reaches twenty-two thousand dollars (calculated as twenty-two thousand dollars times five percent equals one thousand one hundred dollars).

Calculation Examples

Example One: PSW Earning Twenty Thousand Dollars Annually

Yearly eligible remuneration: twenty thousand dollars
Tax credit calculation: Twenty thousand dollars times five percent equals one thousand dollars
Personal Support Workers Tax Credit: One thousand dollars

This PSW receives a one-thousand-dollar refundable tax credit, providing meaningful annual financial support.

Example Two: PSW Earning Twenty-Five Thousand Dollars Annually

Yearly eligible remuneration: Twenty-five thousand dollars
Tax credit calculation: Twenty-five thousand dollars times five percent equals one thousand two hundred fifty dollars
Maximum PSW Tax Credit: One thousand one hundred dollars (limited to maximum)

Even though the five-percent calculation yields one thousand two hundred fifty dollars, the credit is capped at one thousand one hundred dollars. This PSW still receives the maximum one thousand one hundred dollar credit.

Example Three: PSW Earning Twelve Thousand Dollars Annually

Yearly eligible remuneration: Twelve thousand dollars
Tax credit calculation: Twelve thousand dollars times five percent equals six hundred dollars
Personal Support Workers Tax Credit: Six hundred dollars

This PSW receives a six-hundred-dollar credit, proportional to their income.

Example Four: PSW Working Multiple Part-Time Positions

A PSW might work twenty hours weekly at a home care agency earning twelve thousand dollars annually and another fifteen hours weekly at a nursing home earning ten thousand dollars annually, for combined yearly eligible remuneration of twenty-two thousand dollars.

Combined tax credit calculation: Twenty-two thousand dollars times five percent equals one thousand one hundred dollars
Personal Support Workers Tax Credit: One thousand one hundred dollars (maximum)

By aggregating eligible remuneration across all PSW positions, this individual qualifies for the full maximum credit.

Maximum Credit Impact

The one-thousand-one-hundred-dollar annual maximum represents significant relief for PSWs often earning modest incomes. For a PSW earning twenty-two thousand dollars annually, this credit represents five percent of total annual income—a meaningful boost to take-home pay.

For PSWs earning higher amounts (over twenty-two thousand dollars), the benefit remains capped at the one-thousand-one-hundred-dollar maximum, which still provides substantial annual financial support.

Eligibility Criteria for the Personal Support Workers Tax Credit

Who Qualifies as an Eligible Personal Support Worker?

To qualify for the Personal Support Workers Tax Credit, you must meet specific criteria established by the Canada Revenue Agency. Understanding these requirements is essential to determine your eligibility.

Performing PSW Duties: You must perform duties of employment in the capacity of a personal support worker. This means your primary job title and responsibilities align with personal support worker roles. While job titles vary across employers (home care aide, care aide, PSW, nursing assistant, support worker), the actual duties performed determine eligibility.

Primary Duties Include Essential Support: Your duties must ordinarily include providing one-on-one care and essential support to optimize and maintain another individual’s health, well-being, safety, autonomy, and comfort. This requirement aligns with standard PSW responsibilities but excludes purely administrative roles, clerical positions, or supervision roles that don’t involve direct care provision.

Direction by Healthcare Professional: The care and support you provide must be provided as directed by a regulated health care professional (such as a physician, nurse, social worker) or provincial or community health organization. This requirement ensures PSW activities align with healthcare planning and standards.

Employment for Eligible Health Care Establishment: You must work for an eligible health care establishment. The Income Tax Act defines eligible health care establishments as hospitals, nursing care facilities, residential care facilities, community care facilities for the elderly, home health care establishments, and similar regulated health care establishments.

This definition includes:

• Hospitals (public and private)
• Nursing homes and long-term care facilities
• Residential care facilities
• Community care facilities specifically for the elderly
• Home health care agencies and home support services
• Similar regulated healthcare establishments

The definition does NOT include recreational facilities, private households where you are self-employed, or unregulated care establishments.

Geographic Eligibility: Provincial and Territorial Exceptions

The Personal Support Workers Tax Credit applies only in provinces and territories NOT covered by bilateral wage support agreements with the federal government. This reflects the government’s policy of avoiding duplicate benefits—if your province has already signed an agreement to increase PSW wages directly, you do not qualify for the tax credit.

Provinces and Territories COVERED by Bilateral Agreements (PSWs NOT Eligible for Tax Credit):

British Columbia: Signed a bilateral agreement in February 2023 providing two hundred thirty-two million dollars over five years to increase PSW wages. PSWs employed in British Columbia do not qualify for the tax credit.

Newfoundland and Labrador: Signed a bilateral agreement providing twenty-five million dollars over five years for PSW wage increases. PSWs employed in Newfoundland and Labrador do not qualify for the tax credit.

Northwest Territories: Signed a bilateral agreement providing five point three million dollars over five years for PSW wage support. PSWs employed in the Northwest Territories do not qualify for the tax credit.

Provinces and Territories ELIGIBLE for Personal Support Workers Tax Credit:

All other Canadian provinces and territories qualify, including:

• Alberta
• Saskatchewan
• Manitoba
• Ontario
• Quebec
• New Brunswick
• Nova Scotia
• Prince Edward Island
• Yukon
• Nunavut

PSWs employed in these jurisdictions are eligible to claim the Personal Support Workers Tax Credit for 2026 through 2030.

Eligibility Verification and Employer Certification

The Canada Revenue Agency does not automatically verify your eligibility for the Personal Support Workers Tax Credit. Instead, your employer certifies your eligible earnings in prescribed form and manner when you file your tax return.

Employer Certification Requirements:

Your employer must provide written certification (on CRA-prescribed forms) confirming:

• Your employment as a personal support worker
• Your eligible yearly remuneration (total taxable employment income earned performing PSW duties)
• The province or territory where you worked
• Confirmation that your work meets the definition of eligible personal support work for an eligible health care establishment

You should request this certification from your employer when filing your tax return. If your employer fails to provide certification, you may need to contact the CRA for guidance on supporting your claim.

Multiple Employers:

If you worked as a PSW for multiple employers during the year, each employer should provide certification of their portion of your eligible earnings. You combine all certified amounts to calculate your total yearly eligible remuneration and your tax credit.

How to Claim the Personal Support Workers Tax Credit

Who Must File a Tax Return to Claim

To receive the Personal Support Workers Tax Credit, you must file a personal income tax return (T1 General return). Even if you normally do not need to file a return (because your income is below the basic personal amount or other filing exemptions), you must file to claim this refundable tax credit.

Filing Your Return with PSW Tax Credit

When filing your 2026 and subsequent-year returns, you will report your employment income and identify yourself as an eligible personal support worker claiming the credit. The specific line number and form for claiming the Personal Support Workers Tax Credit will be identified in CRA-published tax guides and the annual T1 return instructions.

Documentation to Have Available:

When filing your return, have ready:

• Employment income statements (T4 slips) from each PSW employer
• Employer certification of eligible remuneration
• Records of all PSW employment positions held during the year
• Confirmation of province or territory of employment for each position

Using Tax Software:

Most Canadian tax software providers will include the Personal Support Workers Tax Credit in their 2026 and subsequent-year returns. When completing your return using software, identify yourself as an eligible personal support worker and enter your eligible remuneration amounts. The software will automatically calculate your five-percent credit (to the maximum of one thousand one hundred dollars) and include it in your tax calculation.

Using Professional Tax Preparers:

Many PSWs use tax preparation services to file their returns. When meeting with your tax preparer, provide:

• All employment documentation
• Employer certification of eligible earnings
• Information about multiple employers if applicable
• Provincial or territorial employment information

Your tax preparer will identify your PSW eligibility and ensure the credit is properly claimed.

Filing Deadlines and Refund Timing

The filing deadline for claiming the Personal Support Workers Tax Credit is the same as other personal income tax returns:

• April 30 for non-self-employed individuals
• June 15 for self-employed individuals (though payment remains due April 30)

You can file your return at any time after the end of the taxation year. Filing earlier allows earlier receipt of your refund, including the Personal Support Workers Tax Credit.

Once you file your return and the CRA processes it, if you are entitled to a refund (including the PSW tax credit), the CRA will deposit funds into your bank account (if you have authorized direct deposit) or mail a cheque, typically within two to four weeks of filing.

Amended Returns and Missed Claims

If you did not claim the Personal Support Workers Tax Credit on a prior-year return (2026-2030), you can file an amended return to claim it. You generally have up to three years from the original filing deadline to request an assessment or reassessment of your return.

To file an amended return:

1. Obtain a copy of your original return
2. Make corrections and identify the Personal Support Workers Tax Credit claim
3. File the amended return with CRA, clearly indicating it is an amended return
4. Include a letter explaining the changes you are making and why

After CRA reviews your amended return, they will issue a new Notice of Assessment reflecting the PSW tax credit claim and any resulting refund.

The Context: PSW Wage Crisis and Government Response

The PSW Wage Situation in Canada

Personal support workers face a significant wage crisis relative to other healthcare professionals and compared to workers in other sectors. Understanding this context explains why the government introduced the Personal Support Workers Tax Credit and why the measure is viewed as important by PSW organizations, healthcare leaders, and policymakers.

Wage Statistics:

According to Job Bank Canada data (2024-2025), PSW median wages vary by province:

• National median hourly wage (home support): Twenty dollars per hour
• National median hourly wage (nursing care): Twenty-three dollars per hour
• Range across provinces: Fifteen dollars fifty-five cents to thirty-six dollars fifty-three cents per hour
• Newfoundland and Labrador: Lowest median (seventeen dollars forty cents per hour)
• Yukon/Nunavut: Highest median (thirty-two to thirty-six dollars per hour)

For a PSW working forty hours weekly at the national median of twenty dollars per hour, annual income would be approximately forty-one thousand dollars, below many poverty thresholds.

Pay Gap Relative to Other Healthcare Workers:

PSWs earn substantially less than registered nurses and nurse practitioners:

• Registered nurses (median): Approximately thirty-three dollars per hour
• Nurse practitioners (median): Approximately forty-two dollars per hour
• Pay gap: PSWs earn twenty-five to thirty percent less than registered nurses despite similar educational requirements

Job Characteristics:

Many PSWs work part-time or casual positions with irregular schedules:

• Limited benefits compared to full-time employees
• Minimal job security (many casual positions)
• Limited opportunities for advancement
• Physical and emotional demands requiring training and certification
• High burnout rates and workforce turnover

Government Response: From Bilateral Agreements to Tax Credit

The government’s approach to PSW support has evolved:

Phase One – Bilateral Agreements (2023):
In February 2023, the government announced one point seven billion dollars over five years through bilateral wage agreements with specific provinces to directly increase PSW wages. British Columbia, Newfoundland and Labrador, and the Northwest Territories signed agreements providing direct wage increases.

Phase Two – Personal Support Workers Tax Credit (2025):
Budget 2025 introduced the Personal Support Workers Tax Credit as a complementary approach for provinces and territories not covered by bilateral agreements. Rather than direct wage increases, this measure provides refundable tax credits delivering financial support directly to PSWs.

The combination approach ensures all Canadian PSWs receive federal government support, whether through direct provincial wage increases (bilateral agreement provinces) or tax relief (remaining provinces and territories).

Why PSW Support Matters

Healthcare System Sustainability: As Canada’s population ages, demand for long-term care and home support services increases dramatically. Without PSW recruitment, retention, and support, the healthcare system cannot meet aging population care needs.

Affordability Crisis: Many PSWs work multiple part-time positions and still earn modest incomes. Providing tax relief helps make life more affordable for this essential workforce.

Retention and Recruitment: PSW shortages are a critical healthcare challenge. Improving compensation and support (whether through wage increases or tax relief) helps attract new workers and retain experienced PSWs.

Economic Stimulus: Providing tax relief to lower-income PSWs puts money in pockets of workers likely to spend it locally on rent, food, childcare, and other necessities, providing economic stimulus.

Recognition and Respect: Beyond the financial benefit, providing the Personal Support Workers Tax Credit recognizes and respects the essential contributions PSWs make to Canadian society and healthcare system functioning.

The Five-Year Timeline and Future Outlook

Application Period: 2026-2030 Taxation Years

The Personal Support Workers Tax Credit applies specifically for:

• 2026 taxation year (filed in 2027)
• 2027 taxation year (filed in 2028)
• 2028 taxation year (filed in 2029)
• 2029 taxation year (filed in 2030)
• 2030 taxation year (filed in 2031)

This five-year timeframe represents a temporary measure. After 2030, unless the government extends or modifies the credit, PSWs in provinces and territories without bilateral agreements will no longer qualify for this specific tax credit.

Future Outlook and Policy Considerations

The temporary nature of the Personal Support Workers Tax Credit raises questions about longer-term PSW support:

Extension Possibilities: The government may extend the credit beyond 2030 if PSW support remains a policy priority and funding is available.

Provincial Negotiations: Additional provinces might sign bilateral wage agreements, expanding direct wage increase coverage beyond the current three provinces.

Policy Evolution: Other approaches to PSW support might emerge, including direct wage supplements, recruitment bonuses, or other incentives.

Healthcare System Changes: Broader healthcare system reforms might affect PSW roles, compensation, and employment structure.

PSWs should plan financially recognizing the temporary nature of this credit, though maintaining the credit or implementing comparable support for future years remains a policy possibility.

BOMCAS Canada: Expert Tax Services for Personal Support Workers

BOMCAS Canada specializes in comprehensive personal income tax preparation and planning for all Canadian workers, including personal support workers. The firm’s dedication to maximizing tax relief and identifying all available credits ensures PSWs receive full benefit from the Personal Support Workers Tax Credit and all other applicable tax advantages.

Personal Support Worker Tax Return Preparation

BOMCAS Canada provides complete tax return preparation for personal support workers, ensuring accurate reporting and maximum tax relief:

Personal Support Workers Tax Credit Identification and Claiming: The firm identifies PSW clients eligible for the Personal Support Workers Tax Credit, gathers required employer certification, and ensures the credit is properly claimed on your tax return.

Multiple Employer Coordination: Many PSWs work for multiple employers in different settings. BOMCAS Canada aggregates income across all PSW positions, ensuring your complete eligible remuneration is reflected in your tax credit calculation.

Verification of Employer Certification: The firm ensures your employers provide required certification of eligible earnings. If employers fail to provide certification, BOMCAS Canada assists with CRA guidance to support your claim.

Virtual Filing Service: BOMCAS Canada provides tax return preparation services virtually, serving PSWs across all provinces and territories. You can work with the firm remotely, eliminating geographic barriers and providing convenient service.

Maximizing All Available Tax Relief

Beyond the Personal Support Workers Tax Credit, BOMCAS Canada identifies all tax deductions and credits for which PSWs qualify:

Deductible Employment Expenses: Many PSWs can deduct certain employment expenses including uniforms or special clothing required for work, work-related supplies, and professional dues or union fees.

Medical Expense Credits: PSWs with significant personal or family medical expenses may qualify for medical expense tax credits (available when expenses exceed three percent of income or a minimum threshold).

Childcare Deduction: PSWs with childcare expenses can deduct costs of childcare enabling them to work, with deductions limited to earned income and varied by child age.

Home Office Deduction: If performing any work-from-home duties, proportionate home office expenses may be deductible.

Disability Tax Credit: If eligible due to physical or mental impairment, the disability tax credit (approximately nine thousand eight hundred seventy-two dollars annually for adults) provides substantial tax relief.

Other Credits and Deductions: BOMCAS Canada reviews all aspects of your tax situation to identify every available tax benefit.

Financial Planning and Budgeting Support

Understanding your tax position and planning for future years helps PSWs maximize financial security:

Tax Refund Optimization: BOMCAS Canada adjusts withholding on your T4 employment if you consistently receive refunds, ensuring more of your income remains available throughout the year rather than being loaned to the government interest-free.

Multi-Year Tax Planning: The firm analyzes your tax situation across multiple years, identifying opportunities to structure income or expenses to minimize lifetime tax liability.

RRSP and Savings Planning: While PSWs earn modest income, contributing to RRSPs when possible provides tax deductions and retirement savings. BOMCAS Canada helps evaluate RRSP strategy considering PSW circumstances.

Government Benefits Coordination: Some government benefits phase out as income increases. BOMCAS Canada considers interactions between tax planning and government benefit eligibility to optimize overall financial outcomes.

Why Choose BOMCAS Canada for PSW Tax Services

BOMCAS Canada combines:

• Expert knowledge of all federal and provincial tax credits and deductions
• Dedication to identifying every available tax benefit for PSW clients
• Understanding of Personal Support Workers Tax Credit requirements and claiming procedures
• Virtual service delivery providing convenient access across Canada
• Competitive pricing reflecting BOMCAS Canada’s virtual service model
• Commitment to professional excellence and CRA compliance
• Compassion for PSWs’ financial circumstances and dedication to improving their financial outcomes

Whether you are claiming the Personal Support Workers Tax Credit for the first time, working for multiple employers, or seeking comprehensive tax planning as a PSW, BOMCAS Canada provides the professional expertise and personalized service you deserve.

Important Dates and Reminders

November 4, 2025: Budget Day—Personal Support Workers Tax Credit announced

2026 Taxation Year First Claiming Opportunity: PSWs can claim the credit on their 2026 tax return filed by April 30, 2027

Annual Filing Deadlines:

• April 30, 2027: 2026 PSW Tax Credit claim deadline
• April 30, 2028: 2027 PSW Tax Credit claim deadline
• April 30, 2029: 2028 PSW Tax Credit claim deadline
• April 30, 2030: 2029 PSW Tax Credit claim deadline
• April 30, 2031: 2030 PSW Tax Credit claim deadline

Eligible Provinces and Territories: All except British Columbia, Newfoundland and Labrador, and Northwest Territories

Maximum Annual Credit: One thousand one hundred dollars

Calculation: Five percent of yearly eligible remuneration (to maximum)

Employer Certification Required: Yes, employers must certify eligible earnings

Conclusion: Valuing Canada’s Personal Support Workers

The Personal Support Workers Tax Credit represents meaningful recognition of the essential contributions PSWs make to Canadian healthcare and society. Providing up to one thousand one hundred dollars in annual tax relief acknowledges that PSWs deserve support and respect despite being among the lowest-compensated healthcare professionals.

For over two hundred thousand personal support workers in provinces and territories without bilateral wage agreements, the Personal Support Workers Tax Credit delivers tangible financial relief during a critical five-year period (2026-2030). For many PSWs earning modest incomes, this credit represents five percent of annual earnings—a meaningful boost to take-home pay supporting basic needs and financial stability.

BOMCAS Canada recognizes PSW importance and is committed to ensuring every eligible PSW claims the full Personal Support Workers Tax Credit while maximizing all other available tax relief. The firm’s experienced tax professionals understand PSW circumstances and are dedicated to helping this essential workforce achieve financial security through comprehensive and expert tax planning and preparation.

Contact BOMCAS Canada today for a complimentary consultation to discuss your personal income tax situation as a PSW and explore how the Personal Support Workers Tax Credit and other tax measures can support your financial well-being. The firm’s dedicated tax professionals are ready to help Canada’s personal support workers maximize their after-tax income and achieve financial security.