The first long weekend of the summer season is already in the rear-view mirror, but with several more to go, there is a temporary tax credit you should consider while planning your annual excursions. In an effort to help support the hospitality and tourism industry that has been hit hard by the last two years of pandemic restrictions, the Ontario government is temporarily offering an Ontario Staycation Tax Credit.
What is the Ontario Staycation Tax Credit?
The credit is a personal income tax credit that allows Ontario residents to claim up to 20% of qualifying accommodation tax credits to a maximum of $1000 per individual and $2000 per family. The credit applies to stays within Ontario between January 1, 2022, and December 31, 2022. Qualifying accommodations are temporary stays of less than a month and include:
- Bed and breakfast establishments
- Vacation property rentals
The credit is applicable to single or multiple stays. It does not apply to transportation costs, car rentals, admissions, groceries, fuel, or parking. Timeshares, boats, and trains are not considered eligible.
Who can apply for the tax credit?
The credit is available to those who are Ontario residents as of December 31, 2022. Only one individual per family can claim the credit and can include eligible expenses of spouses, common-law partners, and eligible children.
The qualifying expenses must have been paid by you, your spouse or common-law partner, or your eligible child. The expense must include the person’s name on a detailed receipt that includes the GST/HST, supplier name, date of the stay, payor, and has been provided by the accommodation supplier.
Claiming the Ontario Staycation Tax Credit
The credit will be claimed on your 2022 personal tax return. It cannot be claimed if you are reimbursed for the accommodation expenses by a spouse, common-law partner, eligible child, friend, or employer. Accommodation expenses for school, work, or that can be claimed as a medical expense tax credit are also not eligible.
What to do in Ontario
Ontario is rich with destinations from the tip of the sunset along the coast of Lake Huron to Algonquin Park to the Sandbanks Provincial Park. Explore smaller towns such as Elora and Creemore or visit Toronto or the nation’s capital Ottawa. For more inspiration, Destination Ontario has some resources on its webpage.
The Ontario Staycation Tax Credit applies to any eligible accommodation within Ontario between January 1, 2022, and December 31, 2022. Whether you are planning summer on a patio or lake or hitting the trails in the fall and winter, be sure to collect and retain any receipts that are eligible for the tax credit. With the potential to claim a maximum savings of up to $200 for individuals or $400 for families means you can enjoy your travel this year and enjoy additional benefits next year.
For more details on the Ontario Staycation Tax Credit, please go to https://www.ontario.ca/page/ontario-staycation-tax-credit. To discuss your personal tax returns, please contact us.