Ontario Staycation Tax Credit (Keypoints You Need To Know)

Ontario Staycation Tax Credit is designed to encourage Ontario families to explore their province and directly help the hospitality and tourism sector to recover from the negative financial effects the COVID-19 pandemic has on them.

The tax credit measure helps to offer indirect relief to Ontario tourism and hospitality businesses to encourage Ontario residents to travel within their province. However, this temporary tax credit may be discontinued when the goal is met. The tax credit aims to provide an estimated $270 million to support about 1.85 million Ontario families.

As an Ontario resident, you can claim 20% of your eligible 2022 accommodation expenses, whether you stay on a campground, cottage, or hotel when filing your personal Income Tax and Benefit Return for 2022. As an individual, you can claim eligible expenses of up to $1,000 and up to $2,000 if you are married or have a common-law partner or eligible children.

Who is Eligible Ontario Staycation Tax Credit?

To be eligible for the Ontario staycation tax credit, you must fulfill the following criteria:

• You must be an Ontario resident on December 31, 2022.
• You must note that only one individual per family can claim the credit for a year. The beauty here is that the claim can include the eligible expenses of your common-law partner, spouse, and eligible children. No eligible child is not entitled to claim the Ontario staycation tax credit.
• You can claim your eligible expenses for the credit if you are without a spouse, common-law partner, or eligible child.

What are the Eligible Expenses?

You can claim the Ontario Staycation Tax Credit when filing your tax for accommodation expenses for less than a month’s leisure stay in Ontario, camping accommodation, or a short-term accommodation at the following:

• hotel
• resort
• lodge
• cottage
• campground
• motel
• bed-and-breakfast establishment
• vacation rental property

Note that you can only claim the tax credit for leisure stays between January 1, 2022, and December 31, 2022, regardless of your mode of payment. For you to be eligible, you must pay your accommodation expenses yourself, or they can be paid on your behalf by your spouse, a common-law partner, or your eligible child, as listed on a detailed receipt provided by the Goods and Services Tax (GST)/Harmonized Sales Tax (HST).

You can claim the below expenses as long as you have met the above conditions:

• The accommodation portion of a tour travel package expense
• Accommodation for a single trip or multiple trips as an individual or family if the expenses are capped at the maximum expense limit of $1,000 as an individual or $2,000 as a family.
• The expense that covers the accommodation access
• Accommodation expenses are spent on booking online on an accommodation platform or booked directly with the accommodation provider.
• For any of the above expenses, you must keep detailed receipts, and these receipts must cover information on the following:
• the date of the stay
• the payer’s name
• the accommodation location
• the considered portion of money for the accommodation
• the amount of GST/HST paid

What are the Ineligible Expenses?

Here are some ineligible accommodation expenses, and you cannot cover the expenses.

The ineligible expenses are as follows:

• Expenses incurred on short-term accommodation that does not include a timeshare agreement or a stay on a train, boat, or other self-propelled vehicle.
• travel expenses that do not cover camping accommodation or short-term accommodation, such as expenses for groceries, flights, parking, car rentals, fuel, or prices of admission into places of interest or local attractions
• accommodation expenses returned to you, your spouse or common-law partner, or your eligible child by any individual, including your employer or friend
• expenses incurred for business purposes, work, education, school, employment purposes, or expenses that can be claimed for a medical expense tax credit

How to Claim Ontario Staycation Tax Credit

You can easily make claims of the credit on your personal Income Tax and Benefit Return for 2022. You must know that Ontario Staycation Tax Credit is a refundable personal income tax credit. This entails that you can get the tax credit if you are eligible, regardless of whether you owe income tax for 2022.

How Does The Ontario Staycation Tax Credit Work?

Ontario residents, when filing their personal Income Tax and Benefit Return for 2022, can claim 20% of their eligible 2022 accommodation expenses.

Does Airbnb count for the Ontario Staycation Tax Credit?

Yes. Airbnb rentals can be included as one of the eligible expenses as long as the Airbnb owner is registered for GST/HST and the accommodation fulfills all the other laid down requirements,

Am I Eligible to Claim The Tax Credit Even If I Don’t Owe Income Tax For 2022?

Yes, provided you can be eligible for the tax credit if you don’t owe income tax for 2022, as long as you meet the other criteria.

Conclusion

Ontario Staycation Tax Credit is a temporary relief program to help the hospitality and tourist industries regain their financial strength after the impact of the COVID and, at the same time, encourage their residents to travel and reward them for expenses spent on short-term accommodations.

If you need further clarifications or have inquiries, you can contact the Canada Revenue Agency by phone, at 1-800-959-8281 or at a tax services center or office.