Are you planning for a Vacation in Ontario? Ontario Staycation Tax Credit can save you money this summer.
Residents of Ontario for their well-deserved vacation after COVID between January 1 to December 31, 2022, will be eligible for Staycation credit. You’ll be eligible to claim a personal income tax credit of 20% of your accommodation expenses, up to a maximum of $1,000 for individuals and $2,000 for a family if you have a spouse, common-law partner or children. That means saving $200 or $400, respectively, just for booking accommodation.
Thus, the credit will benefit the taxpayer, boost the industry locally, and encourage travel. It also gives more money back to Ontarians to help offset the cost of that travel.
Who is eligible
If you are an Ontario resident on December 31, 2022, you are eligible to claim the credit for the year.
Only one person per family can claim for the year, but the expenses can include those of your spouse or common-law partner and eligible children. A child is not able to claim the credit.
If you do not have a spouse, common-law partner, or eligible child, you can claim your eligible expenses for the credit.
You must keep your receipts and file your income tax return for 2022 to report this.
What are eligible expenses
To avail of the benefit of the staycation tax credit, the expenses must have been paid by you, your spouse or common-law partner, or your eligible child, namely expenses for a leisure stay in a:
- Hotel
- Motel
- Resort
- Lodge
- Bed-and-breakfast establishment
- Cottage
- Campground
- Vacation rental property
To claim the exemption, the expenses should be set out on a detailed receipt provided by a supplier registered for the Goods and Service Tax (GST)/Harmonized Sales Tax (HST).
What are ineligible expenses?
The tax credit cannot be claimed for:
- Travel expenses that are not for short-term accommodation or camping accommodation, such as expenses for car rentals, fuel, flights, groceries, parking, or prices of admission into local attractions and places of interest
- Accommodation expenses reimbursed to you, your spouse or common-law partner, or your eligible child, by any person, including by a friend or an employer
- Expenses that are incurred for school or educational purposes, or for a work, employment or business purpose, or an expense that is eligible for a medical expense tax credit don’t qualify.
How to claim the credit
The Ontario staycation tax credit is a refundable personal income tax credit. If you’re eligible, you can get this tax credit regardless of whether you owe taxes for 2022.
If you have any further questions regarding the staycation tax credit, book a call with us at Rav Bhatia CPA Professional Corporation and get an instant professional opinion.