Take Advantage of the 2022 “Staycation Tax Credit” for Residents of Ontario

The arrival of 2022 brings with it a host of new laws and a tax credit to encourage people and their families to travel within the province of Ontario. The credit returns 20% of accommodation expenses to individuals and families to help them spend their vacation dollars closer to home. Qualifying for the credit is easy, and it’s designed to help businesses in Ontario recover from the economic losses suffered during COVID-19 restrictions. At Advantage Car and Truck Rental, we want to help you understand the tax credit so you can take full advantage and get some money back on your vacation expenses.

image credit: planetware.com

Why is Ontario Offering the Staycation Tax Credit?

The COVID-19 pandemic has hit Ontario tourism businesses hard, and the government is incentivizing residents to vacation locally to help businesses recover. The credit is designed to reward residents who go to destinations like Toronto and Niagara falls in the south, Ottawa in the northeast, and Ouimet Canyon in the northwest. The goal is to get residents of Ontario to visit places in their near and distant backyards without going outside of the borders.

How Much is the Credit?

The credit is 20% of your expenses with a maximum expense of $1,000 for individuals and $2,000 for families. You can get a credit of $200 as an individual and $400 for a family.

Who’s Eligible?

Anyone who is a resident of Ontario on December 31, 2022, is eligible to claim the credit. It’s restricted to one person per family, but the claim can include the expenses of your family including your spouse, common-law partner, and eligible children. However, an eligible child can’t claim the credit on their personal income tax return in 2022.

Don’t have a spouse, partner, or child? You can still claim your eligible expenses to get the credit.

What Expenses Can I Claim?

In order to claim the Ontario Staycation Tax Credit, you have to stay less than a month, the reason for needing accommodation is for leisure, and the stay has to be at one of the following:

  • Bed and breakfast
  • Campground
  • Cottage
  • Hotel
  • Lodge
  • Motel
  • Resort

You can’t claim the credit for a timeshare agreement or staying on a self-propelled vehicle such as a boat or train.

The credit is only applicable to vacation stays that take place between January 1, 2022, and December 31, 2022, no matter when or how you paid for the stay. If the stay was for business, you can’t claim the credit.

The expenses have to be paid by you, your partner or spouse, or your eligible child and be laid out on a receipt. The stay also has to have been subject to Goods and Services Tax (GST) or Harmonized Sales Tax (HST) and listed on the receipt as well. Expenses have to be paid by you, your partner or spouse, or your child, and not have been reimbursed by anyone, including an employer or a friend.

Provided all of these conditions have been met, you can claim expenses for one or more trips during 2022. There’s no restriction on how the booking was made, and you can make them through a provider or third-party booking agent. You can claim the portion of the cost that was necessary to get the accommodation, and you can also claim the accommodation portion that’s part of the cost of a tour package.

How do I Claim the Credit?

In order to claim the tax credit, you have to keep detailed receipts of the accommodation expenses. All receipts have to include the following information:

  • Location of the accommodation
  • The reasonable or actual amount of the accommodation portion of the stay
  • GST/HST paid
  • Dates of the stay
  • Name of the payor

The Ontario Staycation Tax Credit is Refundable

Claiming the credit is done when you fill out your personal Income Tax and Benefit Return for 2022. The credit is refundable which means if you have eligible staycation expenses, you can get a tax credit even if you don’t owe taxes for the year. In the event you owe taxes, the credit goes towards lowering your overall tax liability.

Book Your Next Rental With Advantage Car and Truck Rental

Make sure to book with us at Advantage Car and Truck Rental when you’re making your plans for your staycation in Toronto or the surrounding areas. We offer a variety of rental options and deals that help you save money. Simply log onto our website or use the On Demand app to rent a car or truck of your choice, select a pickup or drop-off location, and we’ll guarantee you a set of wheels so you can get around town and enjoy your trip.

Resource Information:
Planning a staycation? You can claim a tax credit if you travel in Ontario this year