In recent years, the idea of a “staycation” – taking a vacation close to home – has become increasingly popular. With the COVID-19 pandemic and the resulting travel restrictions and safety concerns, staycations have become even more appealing. To encourage Ontarians to explore the many attractions and activities the province has to offer, the Ontario government has introduced the Ontario Staycation Tax Credit.
Ontario Staycation Tax Credit – What is it?
The Ontario Staycation Tax Credit is a new tax credit for Ontario residents who spend money on eligible leisure accommodation expenses within the province between January 1, 2022 and December 31, 2022.
To be eligible, you must be a resident of Ontario as of December 31, 2022.
What is Eligible?
Eligible expenses include accommodation expenses related to a leisure stay of less than a month. For e.g. :
- hotel
- motel
- resort
- lodge
- bed-and-breakfast establishment
- cottage
- campground
- vacation rental property
To qualify for the credit, the expenses must be paid by you, your spouse/common-law partner or your eligible child.
What is Not Eligible?
- Expenses not for accommodation – such as car rentals, fuel, flights, etc.
- Any eligible expenses that are reimbursed back to you
- Any eligible expenses that are for school, education, work (employment) or business
How is the Credit Calculated?
The credit is calculated by multiplying the eligible expenses by a credit rate of 20% and is limited to a maximum credit of $200 per person or $400 per family. For example, if a family of four spent $1,000 on eligible expenses during their staycation, their Ontario Staycation Tax Credit would be $200 (20% of $1,000).
How to Claim the Ontario Staycation Tax Credit?
You can claim the tax credit on your 2022 Personal Income Tax Return. This credit is a refundable tax credit; that is, even if you do not have income taxes owing, you can get this credit back as a refund.
As a backup, you will need to keep the detail receipts (with GST/HST information) for eligible expenses The credit can be claimed by either the person who incurred the expenses or a spouse or common-law partner or your eligible children.
Next Steps
Start gathering those receipts! And if you are a personal tax client of Think Accounting, be sure to put together a summary of leisure stay related accommodation expenses so that we help you capture the credit on your 2022 personal tax return.