Ontario Government Introduces Ontario Staycation Tax Credit

The Ontario government is offering a tax credit to Ontario residents for booking accommodations in their home province. The aptly named “Ontario Staycation Tax Credit” allows Ontario residents to claim 20% of their eligible accommodation expenses for 2022. It is estimated that the credit will provide around $270 million in support to about 1.85 million Ontario families.

In the wake of COVID-19 there have been many losses in the tourism and hospitality sectors. This credit is an effort, by the Ontario government, to offset some of those losses and encourage Ontario families to explore and discover their own province.

Anyone who is an Ontario resident on or before December 31, 2022 is eligible to claim this credit. It can only be claimed by one individual per family, but can include eligible expenses of a spouse or common-law partner and/or eligible children (note: an eligible child cannot claim the credit on their personal Income Tax and Benefit Return for 2022).

The Ontario Staycation Tax Credit can be claimed for accommodation expenses of a leisure stay at a short-term accommodation (of less than one month) in Ontario, so no long-term stays. The list of eligible accommodations includes hotels, motels, resorts, lodges, bed-and-breakfast establishments, cottages or campgrounds. It will not include timeshare agreements or a stay on any vehicle that can be self-propelled (train, boat, etc.) The credit only applies to leisure stays (no business travel) between Jan 1, 2022 and December 31, 2022, regardless of the timing of payment for the stays. So, if you prepaid last year, or will be paying in 2023, you are still eligible as long as you, your spouse or common-law partner, or your eligible child is the one paying for the accommodation and it was subject to GST/HST, which will all need to be documented on a detailed receipt. It should be noted that the expense cannot have been reimbursed to you or your family member by any person, including a friend or an employer.

As long as all of the above conditions are met, you can claim any of the following expenses:

  • Accommodation for a single trip or multiple trips, up to the maximum expense limit of $1,000 as an individual or $2,000 as a family
  • Accommodations booked either directly with the accommodation provider or through an online accommodation platform
  • The portion of the expense that is necessary to have access to the accommodation
  • The accommodation portion of a tour package expense

You can claim this credit on your personal Income Tax and Benefit Return for 2022. It is a refundable personal income tax credit, which means if you are eligible, you can get this tax credit regardless of whether you owe income tax for 2022.

To claim the credit you will need to keep your detailed receipt for the expenses you are claiming and it should include the following information:

  • Location of the accommodation
  • Amount that can reasonably be considered to be for the accommodation portion of the stay
  • GST/HST paid
  • Date of the stay
  • Name of the payor

If you are eager to get out and do some traveling, take advantage of this tax credit and discover Ontario. Safe travels!

Sources: https://www.ontario.ca/page/ontario-staycation-tax-credit
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