Claiming Ontario Travel Tax Credit: Where to Report Expenses on Canadian Tax Returns?

Updated on February 22, 2024

If you’re a resident of Ontario who enjoys leisurely stays while exploring the province, this article provides essential information you should be aware of. Dive into this post to learn all about claiming the Ontario Travel Tax Credit and where to report your travel expenses on Canadian tax returns.

Ontario Travel Tax Credit

To boost tourism and travel within the province, Ontario is offering a short-term tax credit. Any trips taken in the current year qualify for the credit, regardless of when the payment is made. When you file your taxes, you could potentially receive up to $400 from this temporary personal income tax credit.

If you’re an Ontario resident on December 31, 2023, and you file your Personal Income Tax and Benefit Return for that year, you can deduct your travel expenses. This means Ontario residents have the opportunity to get back up to 20% on their short-term lodging costs this year, potentially putting an extra $400 in your pocket.

If you’re curious to delve deeper into the Ontario Travel Tax Credit, take a moment to read this post. We’ve compiled comprehensive information on the claiming process, the credit amount, eligible expenses, and other essential details.

What is Ontario Travel Tax Credit?

Launched in November 2021, the Ontario Staycation Tax Credit is a recent addition to the tax benefits for residents of Ontario. It allows citizens to claim eligible expenses related to their leisure accommodations within the province from January 1, 2022, to December 31, 2022.

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The initiative was put in place to support the recovery of the tourist and hospitality sectors, which were hit hard by the financial impacts of the COVID-19 pandemic. Its aim is to motivate residents of Ontario to explore the province.

You can claim a personal income tax credit equivalent to 20% of your lodging expenses. Individuals can claim a maximum credit of $1,000, and families with spouses, children, or common-law partners can claim a maximum credit of $2,000 This means if you spend $200 or $400 on lodging alone, you can potentially receive a credit of that amount.

Ontario Travel Tax Credit Overview

Article Head Ontario Travel Tax Credit
Implemented By CRA
Credit Purpose To encourage travel and tourism in Ontario province.
Credit Amount Single: $1000

Family: $2000

Eligibility Ontario Resident filling tax returns
Get to know More By Clicking Here

Where to Claim Travel Expenses on Tax Returns in Canada?

Only one person per family is eligible to claim the credit. The Ontario Travel Tax benefit is a refundable personal income tax benefit. This means that even if you don’t owe income tax for 2022, you can still receive this tax credit if you meet the criteria.

When preparing for tax season and gathering your T4 and other tax slips, make sure to review your comprehensive travel receipts from stays within Ontario in the relevant year. Keep an eye out for Form ON479, which outlines all the refundable tax credits that Ontario residents can specifically claim.
The childcare access and relief from expenditures (CARE) tax credit in Ontario serves as the parent tax credit for the staycation tax credit. To claim this credit, it’s essential to keep your receipt, which should include the name of the payor, the stay date, lodging location, the amount paid for the accommodation, and the GST/HST paid.

Ontario Travel Tax Credit Eligible Expenses

If you stayed at a hotel, motel, resort, lodge, bed & breakfast, cottage, campground, or vacation rental property in Ontario for less than a month, you may qualify to have your costs reimbursed through the credit. Eligibility requires that either you, your partner, spouse, or your qualifying child paid for the accommodations.

Regarding trip expenses, it’s important to note that Ontario residents cannot deduct costs such as food, gas, auto rentals, airfare, parking, or attraction tickets. Additionally, the staycation tax credit does not apply if the trip was undertaken for business or study purposes.

FAQs

Does the Higher-Income Spouse Matter for Claiming?

No, it doesn’t reduce someone’s net taxable income like a tax deduction does. So, gather your receipts, tally up to $2,000 in family-qualified expenses, and prepare to save a solid $400 – and it doesn’t matter who makes the claim.

How is the Travel Tax Credit Amount Calculated?

You can receive a maximum credit of $200 per person or $400 per family. The credit is calculated by multiplying your qualified expenses by a credit rate of 20%.

Next time you plan to explore Ontario, we hope you’ll keep this tax credit in mind and find the information here helpful.

 

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