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How to access the new Ontario staycation tax credit!

balance business strategy Feb 28, 2022
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If you are a business owner, managing and optimizing your finances are top of mind. You also likely need a vacation, I know I do! That's why reached out to my trusted friend and business finance expert, Cassandra Jamison, CPA and founder of Tyagi Group Consulting, to share business finance resources to help you hustle less and profit more.

How to access the new Ontario staycation tax credit! 

By Cassandra Jamieson, CPA and Founder of Tyagi Group Consulting Inc.

Feeling vacation deprived? Ontarians, you can now start planning your staycation for 2022!

A new “Ontario Staycation Tax Credit” program will come into effect in the new year. Anyone staycationing within the province next year will receive a 20% personal income tax credit on eligible accommodation expenses up to a maximum of $1,000 for an individual and $2,000 for a family. This translates to a maximum credit of $200 for an individual or $400 for a family.

What are the stipulations and fine print?

  • The stay must be less than a month at a hotel, motel, resort, lodge, bed-and-breakfast establishment, cottage or campground in Ontario.
  • For a stay between January 1 and December 31, 2022.
  • Incurred for leisure (not for business).
  • Paid by you, your spouse or common-law partner, or your eligible child.
  • Not reimbursed to you, your spouse or common-law partner, or your eligible child by anyone such as an employer or friend.
  • Subject to GST or HST.
  • You must have a detailed receipt indicating the payer and GST/HST paid. 

How do you apply?

You can apply for this tax credit when you file your 2022 personal income tax return in 2023 - therefore it’s easy and convenient. This will be a refundable tax credit, so even if you don’t owe any personal tax in 2022, you will benefit by getting a refund. So more money to spend on vacations!

Northern Residents Travel Deduction

Residents living in a prescribed northern zone (Yukon, Nunavut, and Northwest Territories) for six consecutive months or longer can claim a deduction for travel benefits received from employment. The deduction is meant to provide relief for those residents that are often faced with a higher cost of living and limited access to services. The deduction reduces the amount of income you pay tax on and therefore reduces your overall income tax payable.

You can claim this deduction if:

  • you received travel assistance or a travel allowance from your employer. 
  • the travel benefit received from your employer is included in your income for tax purposes.
  • you actually incurred expenses to travel for personal reasons (not business).
  • The travel was to and from a prescribed northern zone.
  • You and your employer are not related.

The maximum deduction you can claim for each eligible trip is the lowest of the following:

  • Benefit received from employer.
  • Actual amount spent on your trip.
  • Lowest return airfare available at the time of the trip between the airport closest to your residence and the nearest designated city to that airport.

Travel expenses include air/train/bus fares, vehicle expenses, meals, hotel or motel accommodations, camping fees, taxis and road/ferry tolls.

Lastly, make sure to keep all your receipts for and supporting documentation for CRA! 

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