29 Dec Taxation and You!
Although it may seem early, it is never too early to start thinking about the upcoming tax season! We will be sending out a client communication in early February with detailed information on our tax preparation services, but we want to let all clients know that we are once again offering our popular tax preparation services for the 2022 tax year.
Important Dates to Note:
- Personal tax returns must be filed by May 1, 2023
- Trust tax returns have an earlier deadline of March 31, 2023
What Is The NEW Staycation Tax Credit
NEW Tax Credit – if you have travelled within Ontario in 2022-this one is for you. Ontario Staycation Tax Credit.
How Does the Staycation Tax Credit Work?
Residents who booked a trip anywhere in the province in 2022 are eligible to claim a portion of qualified accommodation expenses thanks to the new, temporary Ontario Staycation Tax Credit
When filing their 2022 personal income tax return, Ontario residents can claim 20% of the eligible accommodation expenses they spent on hotels, motels, cottages, campgrounds, etc. throughout 2022. (In some cases, Airbnb’s, too.)
An individual can claim up to $1,000 in accommodation expenses to receive a maximum of $200, while families can claim up to $2,000 to receive a maximum of $400. (Families include common-law partners and spouses.)
There are refundable and non-refundable tax credits. Refundable tax credits are credits that will be paid to you if you are eligible for them, even if you don’t owe any taxes. Whereas a non-refundable tax credit can only reduce taxes owed to $0.
The Ontario Staycation Tax Credit is a refundable personal income tax credit, which means you are eligible to receive it even if you don’t owe any taxes.
What are the requirements?
In order to be eligible for the tax credit, you must be an Ontario resident on December 31, 2022. Only one individual per family can claim the credit for the year. A detailed receipt is also required to file for the tax credit.
What is eligible?
You cannot claim admission costs, parking, gas, flights, car rentals, etc. The only expenses that are eligible are those related to short-term accommodations (less than a month). That includes hotels, motels, bed-and-breakfasts, campgrounds, lodges, resorts, cottages, and vacation rentals. (Timeshares are typically not included.)
Also, the tax credit only applies to accommodation expenses for leisure travel, not business travel.
Written by Rumi Prince