Ontario’s 2022 Staycation Tax Credit
In light of the many COVID-19 travel restrictions implemented by Ontario, the provincial government has introduced a new temporary Staycation Tax Credit for 2022. The tax credit aims to promote tourism within the province and encourage economic activity for hard-hit businesses in Ontario’s hospitality sector.
The tax credit allows residents to claim 20% of the total cost of eligible accommodation booked between January 1st and December 31, 2022. The maximum amount that can be claimed as a personal income tax credit is 20% of up to $1,000 for individuals and $2,000 for each family. Thus, residents can claim a maximum tax credit of either $200 as an individual or $400 as a family unit.
For you to be eligible to claim the Staycation Tax Credit, you must:
- Be an Ontario resident as of December 31, 2022; and
- Must claim the tax credit as an individual or as the only individual claiming on behalf of a family. Only one person per family can claim the credit for the year, however, their claim can include the expenses of their common-law partner, spouse, or eligible children.
Eligible expenses include:
- Accommodation expenses for a leisure stay of less than a month in Ontario between January 1, 2022, and December 31, 2022;
- Single trip or multiple trips cumulatively;
- The portion of a tour package expense that relates only to accommodation;
- The portion of an expense that is necessary to have access to the accommodation;
- The accommodation can be at a short-term accommodation or camping accommodation such as a hotel, motel, bed and breakfast, resort, lodge, cottage, or campground; and
- The accommodation can be booked either directly or through an online accommodation platform provider.
Additionally, the accommodation expense must be paid by you, your spouse, common law partner, or eligible child (note that eligible children cannot claim the credit on their personal income tax return). The accommodation expense must also be subject to GST/HST on a receipt, and must not have been reimbursed to the payor by any person including a friend or employer.
The accommodation expense does not apply to business travel, timeshare agreements, or stays on a boat, train or other self-propelled vehicles.
Claiming the Credit
Residents may claim the credit on their personal income tax and benefit return for 2022, regardless of whether they owe taxes for 2022.
To claim the credit, you must ensure that you have detailed receipts for the expenses being claimed. The receipts should include information such as the location of the accommodation, the GST/HST paid, date of the stay, and name of the payor.
For individuals who have been contacted by the CRA and are looking for assistance with their tax matter or for other tax law questions specific to you, book a consultation with one of our experienced tax lawyers today. We’re here to help!
This article provides information of a general nature only. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions, you should consult a lawyer.