Book that staycation! How you can get some $$ back by vacationing close to home...

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It’s officially summertime! With the first day of summer recently passing, majority of Ontarians are looking on what they can do during their vacation time this summer. If you’re unsure of what to do, we have the perfect solution: a staycation!

Staying local has more benefits than downsides, especially with the new Ontario Staycation Tax Credit. Unsure of what this means for you? Keep reading to find out!

What exactly is the Ontario Staycation Tax Credit?

The purpose of the Ontario Tax Credit for 2022 is to encourage Ontario families to explore the province while helping the hospitality and tourism industries recover from the effects of the COVID-19 pandemic. Ontario residents can claim 20% of eligible 2022 accommodation expenses when filing their Income Tax and Benefit Return for 2022. An individual can claim up to $1,000 for the year, or $2,000 if you have a spouse, common-law partner, or eligible dependent, to receive $200 as an individual, or $400 for a family.

Who exactly is eligible?

  • Anyone who is an Ontario resident as of December 31, 2022.

    • As a heads up, only one individual per family may claim the credit for the year. The claiming individual can include the expenses of their spouse, common-law partner, and eligible children. An eligible child cannot claim the credit.

  • An individual who does not have a spouse, common-law partner, or eligible children may claim their own expenses for the credit.

What type of expenses are eligible?

The Ontario Staycation Tax Credit can be claimed for any accommodation expenses for a stay of less than a month in Ontario. Some examples of short-term accommodations include:

  • Motels

  • Hotels

  • Resorts

  • Lodges

  • Cottages (yes, cottages booked through Air BnB also apply)

  • Campgrounds

  • Vacation rental property (yes, Air BnB’s too)

  • Bed-and-breakfast

Regardless of when the lodgings are paid, the tax credit is only considered eligible if the stay occurs between January 1, 2022 and December 31, 2022. The accommodation must be paid by either the claiming individual, their common-law partner, or eligible child.

If all of the above conditions are met, you may claim any of the following expenses:

  • A single trip or multiple trip, with a maximum claim of $1,000 for an individual or $2,000 for a family.

  • Accommodations are made through a provider, or through an online accommodation platform.

  • The accommodation portion of a tour package expense.

Detailed receipts relating to the accommodation must be kept in order to claim the tax credit. They must include the following:

  • The location of the accommodation

  • Amount of GST/HST paid

  • The date/s of the stay

  • The name of the individual who paid

  • The amount that can be considered for the accommodation portion of a stay

What type of expenses are ineligible?

  • Timeshare agreements are not considered short-term accommodations

  • A stay on a boat, train, or any vehicle that can be self-propelled

  • Expenses that the payor was reimbursed for

  • Expenses that were incurred for school or educational purposes

  • Expenses that were incurred for work, employment, or business purposes

  • Expenses that can be claimed for a medical expense tax credit

How can you claim this tax credit?

  • This tax credit can be claimed as part of your personal Income Tax and Benefit Return for 2022

  • This is a refundable income tax credit, meaning you can get this tax credit even if you owe income tax for 2022.

Don’t hesitate any longer, and book that staycation today and see all Canada has to offer! Let us know on Instagram where you set of to on your staycation by tagging @cobellafinancial.

If you want to learn more about what tax deductions can be applicable to you, schedule a free consultation with our founder Shantae today!

Sources

(2022, Apr. 12). Ontario Staycation Tax Credit. ontario.ca. https://www.ontario.ca/page/ontario-staycation-tax-credit#section-0\

(2022, Apr. 22). Ontario Staycation Tax Credit 2022. Destination Ontario. https://www.destinationontario.com/en-ca/ontario-staycation-tax-credit-2022
Everything you need to know about the Ontario Staycation Tax Credit. IDM Professional Corporation. https://taxaccountantidm.com/everything-you-need-to-know-about-the-ontario-staycation-tax-credit/

Rachel Donaldson