With increasing costs and limited budgets, many people are opting for a staycation versus a trip abroad. For Ontario residents who are still on the fence about where to spend their next vacation, the Ontario Staycation Tax Credit can be a great incentive to stay local and save.
The Ontario Staycation Tax Credit: Why Now?
Forget about going on a vacation—since 2020, many Canadians have hardly left their homes except to get the essentials. And even then, many had their essentials delivered to their door.
Now that people are starting to think about planning vacations and getaways, the Ontario Staycation Tax Credit is giving Ontarians a reason to stay put.
To help the Ontario tourist and hospitality industries recover from the financial impacts of COVID-19, the Ontario Staycation Tax Credit aims to encourage Ontario residents to explore the province and its many cities and towns.
How Does the Staycation Tax Credit Work?
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, Airbnbs, 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 expenses are 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.
What important dates should I know?
In order to be eligible for this tax credit, your leisurely getaway must take place between January 1 and December 31, 2022. So, remember to keep your receipts! You can look into the Ontario Staycation Tax Credit for further details and information.
Travelling Local Can Save You Money
Many people don't think local when they start to plan their vacations. They think of airplanes, sandy beaches, exotic locations, etc. But there is a lot to explore in our own backyards for a fraction of the costs.
How many of us have hosted guests from other countries and asked them what they want to see and visit while in Ontario? The answers usually include Toronto, the CN Tower (maybe a Blue Jays game), Niagara Falls, Ottawa, Tobermory, etc.
These are all wonderful attractions, but the minute most of us start planning our own vacations or getaways, how likely are these to end up on our own lists?
Some of us might feel that we need the excuse of having company or hosting out-of-town friends and family to see these charming and beautiful places. For example, I haven’t visited Niagara Falls or the St. Jacobs Market since I had visitors here from England in 2016.
Spending our vacation time locally not only supports local businesses—some of which could really use it—but it also helps us save money on travelling costs (e.g., flights, insurance, exchange rates, etc.).
If you have a limited budget but could really use a vacation, visiting a different town, city, or region in Ontario can be a great loophole, especially if you're into camping.
Get Help Managing Debt with Free Credit Counselling
The Ontario Staycation Tax Credit only covers the accommodation portion of your trip, so be mindful not to break the bank when dining out, sightseeing, etc. Plan your budget while planning the trip. For example, I love stopping for a picnic on the way to Niagara or Ottawa. Plus, it's more economical to take your snacks and drinks with you.
Our certified credit counsellors at Credit Canada are here to help. Call us if you're struggling with debt. You want to remember the sights and memories of your next trip, not the bills that come later. Contact us today for a free consultation.