Ontario Staycation Tax Credit
We’ve all heard the talk about the Ontario Staycation Tax Credit and the benefits it can bring by encouraging Ontarians to explore close to home this year. In early January 2022 Ontario officially introduced its new travel incentive program designed to encourage visitation at accommodations across the province.
The new program provides incentives of up to 20 per cent in tax refunds for visitors’ accommodation expenses of up to $1,000 per person.
As tourism operators in Ontario’s Highlands, it’s important we understand exactly what this incentive means, and how we can market it to our best advantage. Naturally, people have questions, and here at the Ontario’s Highlands Tourism Organization, we have the answers.
Read on to find out everything you need to know about the tax credit and what it means for your business in 2022.
What is the Ontario Staycation Tax Credit
The Ontario Staycation Tax Credit was created to encourage Ontario families to explore the province and be part of the tourism and hospitality sectors’ recovery from the COVID-19 pandemic.
The program provides a 20 per cent tax refund for accommodation expenses of up to $1,000 for an individual or $2,000 for spouse, common-law partner, or eligible children. That equates to a $200 tax credit for an individual or a $400 tax credit for a couple applied to your 2022 income tax return.
The Ontario Staycation Tax Credit is a refundable personal income tax credit. This means this tax credit regardless of whether the claimant owes income tax for 2022.
Who can claim the tax credit?
Anyone who lived in Ontario on Dec. 31, 2021 qualifies for the Ontario Staycation Tax Credit.
How can my business benefit?
We suggest all businesses promote the Ontario Staycation Tax Credit to their customers, whether they are an accommodator or not. The reason for this is because if you encourage visitors to come and spend the night at a local accommodation, they are also likely to spend money at local restaurants, events, and experiences. It’s a win for everyone in the industry! And we like that.
If you are an accommodator, we suggest you ensure customers staying with you will qualify for the tax credit by providing customers with a detailed receipt that includes the following:
- Your location
- The accommodation portion of a stay
- The GST/HST paid
- The date of stay
- The name of the payor
What expenses qualify for the tax credit?
The tax credit is available for accommodation expenses only. Eligible accommodations include overnight stays (for up to one month) in a hotel, bed and breakfast, lodge, resort, motel, or cottage or campground between Jan. 1, 2022 and Dec. 31, 2022.
Please note the Ontario Staycation Tax Credit only applies to those accommodation charges where the amount of HST paid is itemized on the bill.
How can people claim their tax credit?
The staycation tax credit is claimed on an individual’s 2022 Personal Income Tax submission. Customers must keep receipts from their accommodation booking to submit with their taxes, or keep on hand in the event they are requested. Please note the Ontario Staycation Tax Credit only applies to those accommodations which charge HST and the HST must be itemized on the bill.
What can I tell my customers and visitors about the tax credit?
This program is brand new which means it’s a little confusing for customers. As an experience provider in Ontario’s Highlands, your task will be to help clear up some of the confusion and educate your customers about the program and how they can benefit.
You can do this by the following:
- Post about it on social media – refer customers to the provincial website here.
- Include it in your newsletters – help spread the message!
- Ensure your staff are informed about the program (particularly important for accommodators). Provide them with handouts if possible.
- Refer customers to the story OHTO developed about the program, available here.
- Partner with accommodations to share information with them and ask them to also refer business your way!
Looking for more information?
Visit the Ontario Staycation Tax Credit website for more details about the program and a Frequently Asked Questions section. You can also call the Ontario Budget Hotline at 1-800-337-7222.