Everything You Need to Know About Ontario Staycation Tax Credit?

A vacation, trip, or traveling are words that many people have not heard for a long time. Forget about a trip; Canadians have not even stepped out much from their houses thanks to the Covid limitation and restrictions. But as the cases are gradually reducing, it is becoming safer to travel and visit places for leisure and fun. And the staycation tax credit is a step to promote people to travel more.

When covid began in 2020, it affected the flow of tourists, leading to a major loss of revenue for hospitality and travel businesses. So, to cope with these losses and again fuel the flow of tourists, staycation credit is given. It is a completely different form of credit than a normal cash advance Canada loan. In this blog, you will learn everything about the staycation tax credit and how you can claim it.

What is a staycation tax credit?

The new staycation tax credit is a new law on a run that helps people to claim a portion of their expenses that they will spend on their stays while traveling. This credit has been applied to let more people travel at a lower cost. So, if you are planning any future trip, you can get the benefit of a staycation tax credit and get back up to 20% of your accommodation expenses.

How does it work?

Ontario citizens can deduct 20% of the approved lodging costs incurred in hotels, motels, cottages, campgrounds, etc., during 2022 when they file their income tax return (Sometimes, Airbnb’s as well).

A single person may claim up to $1,000 in lodging costs for a maximum payment of $200, while a family may claim up to $2,000 for a maximum payment of $400. This is because a family includes everyone in a home, like husband-wife, grandparents, and children. In short, it means you can save $200 to $400 on booking rooms and hotels.

Tax credits can be refundable or non-refundable. If you qualify for refundable tax credits, you will receive them even if you have no tax liabilities. On the other hand, a non-refundable tax credit means the credit will only make your current tax liability $0, and if you owe no tax, you won’t get a tax benefit.

How to avail the staycation tax credit?

Availing of a staycation tax credit is quite easy. You can file for the tax credit at the end of the year while filing your tax returns.

For you to successfully avail the staycation tax credit, you have to travel between 1 January 2022 to 31 December 2022. 

While submitting your tax return, you must have all the concerned bills and receipt of your stay to receive the tax credit. Your bill must include the location of the accommodation,

the reasonable amount that can be considered for the accommodation, the amount of any GST/HST paid, the date of the stay, and the name of the payor.

Things to know before filing a tax return

You must be a citizen of Ontario to receive the tax benefit.

Only leisure stays within the territory of Ontario are considered for a tax credit.

Your accommodation must be eligible for a staycation. Following are the stay locations. You can find out more about them on the official page of the Ontario government.

  • Hotel
  • Motel
  • Resort
  • Lodge
  • Bed-and-breakfast establishment
  • Cottage
  • Campground
  • Vacation rental property

The tax credit is only applied to leisure stays, so you won’t be able to get a tax credit for your business trips.

What expenses are not included?

Convenient as it may seem, but there are some things that are part of travel but cannot be claimed under the staycation tax credit. Here are the things that you cannot claim under the tax credit.

In short term loans stays, a time-share agreement, staying on a train, a boat, or a moving home that can be self-propelled is not considered a part of a short-term stay.

Any other travel expenses that are not particularly a part of the stay, such as fuel expenses, vehicle rental cost, flight cost, food cost, amusement park, entry tickets, groceries, or parking bills, are not included in Staycation tax credit returns.

Any reimbursed accommodation expense to your spouse, child, friend, or common-law partner.

Any expense that can be claimed under the medical expense tax credit or the charges incurred for work or business purposes, education, or amusement purposes cannot be claimed under the staycation tax credit.

Why did the government start the staycation?

The main goal of implementing the staycation tax credit is to promote intrastate travel. For example, if your friend asks you what the best places to travel to in Ontario are? There will be a lot of places, you may say, such as Toronto, CN Tower, Niagara Falls, etc. But when you plan a trip, how likely is it that you will visit these places?

Many people travel interstate but only seldom go intrastate. So, by implementing the new tax credit, the Ontario government is promoting people to travel within Ontario and increasing the movement of tourists within the state.

When people move from one place to another, it is obvious that they will spend money in those places to buy goods or services. So this facilitates the economic transaction and helps the hospitality industry to thrive and emerge from the damages caused by Covid.

The staycation tax credit is currently temporary for this year. It may or may not be continued the next year. So, if you want to go for a trip, plan it this year to reap the benefits of the staycation. Planning a trip and everything is easy, but the main thing is managing finances.

So, you can finance your next trip with the help of Instant Funding. We want you to have a great vacation at the best rates and also reap the benefits of the staycation tax credit. So, take a cash advance Canada loan from us, pack your stuff, and go for an amazing adventure in your home city. A thrilling adventure is just a few clicks away from you.

 

 

A vacation, trip, or traveling are words that many people have not heard for a long time. Forget about a trip; Canadians have not even stepped out much from their houses thanks to the Covid limitation and restrictions. But as the cases are gradually reducing, it is becoming safer to travel and visit places for leisure and fun. And the staycation tax credit is a step to promote people to travel more.

When covid began in 2020, it affected the flow of tourists, leading to a major loss of revenue for hospitality and travel businesses. So, to cope with these losses and again fuel the flow of tourists, staycation credit is given. It is a completely different form of credit than a normal cash advance Canada loan. In this blog, you will learn everything about the staycation tax credit and how you can claim it.

What is a staycation tax credit?

The new staycation tax credit is a new law on a run that helps people to claim a portion of their expenses that they will spend on their stays while traveling. This credit has been applied to let more people travel at a lower cost. So, if you are planning any future trip, you can get the benefit of a staycation tax credit and get back up to 20% of your accommodation expenses.

How does it work?

Ontario citizens can deduct 20% of the approved lodging costs incurred in hotels, motels, cottages, campgrounds, etc., during 2022 when they file their income tax return (Sometimes, Airbnb’s as well).

A single person may claim up to $1,000 in lodging costs for a maximum payment of $200, while a family may claim up to $2,000 for a maximum payment of $400. This is because a family includes everyone in a home, like husband-wife, grandparents, and children. In short, it means you can save $200 to $400 on booking rooms and hotels.

Tax credits can be refundable or non-refundable. If you qualify for refundable tax credits, you will receive them even if you have no tax liabilities. On the other hand, a non-refundable tax credit means the credit will only make your current tax liability $0, and if you owe no tax, you won’t get a tax benefit.

How to avail the staycation tax credit?

Availing of a staycation tax credit is quite easy. You can file for the tax credit at the end of the year while filing your tax returns.

For you to successfully avail the staycation tax credit, you have to travel between 1 January 2022 to 31 December 2022. 

While submitting your tax return, you must have all the concerned bills and receipt of your stay to receive the tax credit. Your bill must include the location of the accommodation,

the reasonable amount that can be considered for the accommodation, the amount of any GST/HST paid, the date of the stay, and the name of the payor.

Things to know before filing a tax return

You must be a citizen of Ontario to receive the tax benefit.

Only leisure stays within the territory of Ontario are considered for a tax credit.

Your accommodation must be eligible for a staycation. Following are the stay locations. You can find out more about them on the official page of the Ontario government.

  • Hotel
  • Motel
  • Resort
  • Lodge
  • Bed-and-breakfast establishment
  • Cottage
  • Campground
  • Vacation rental property

The tax credit is only applied to leisure stays, so you won’t be able to get a tax credit for your business trips.

What expenses are not included?

Convenient as it may seem, but there are some things that are part of travel but cannot be claimed under the staycation tax credit. Here are the things that you cannot claim under the tax credit.

In short term loans stays, a time-share agreement, staying on a train, a boat, or a moving home that can be self-propelled is not considered a part of a short-term stay.

Any other travel expenses that are not particularly a part of the stay, such as fuel expenses, vehicle rental cost, flight cost, food cost, amusement park, entry tickets, groceries, or parking bills, are not included in Staycation tax credit returns.

Any reimbursed accommodation expense to your spouse, child, friend, or common-law partner.

Any expense that can be claimed under the medical expense tax credit or the charges incurred for work or business purposes, education, or amusement purposes cannot be claimed under the staycation tax credit.

Why did the government start the staycation?

The main goal of implementing the staycation tax credit is to promote intrastate travel. For example, if your friend asks you what the best places to travel to in Ontario are? There will be a lot of places, you may say, such as Toronto, CN Tower, Niagara Falls, etc. But when you plan a trip, how likely is it that you will visit these places?

Many people travel interstate but only seldom go intrastate. So, by implementing the new tax credit, the Ontario government is promoting people to travel within Ontario and increasing the movement of tourists within the state.

When people move from one place to another, it is obvious that they will spend money in those places to buy goods or services. So this facilitates the economic transaction and helps the hospitality industry to thrive and emerge from the damages caused by Covid.

The staycation tax credit is currently temporary for this year. It may or may not be continued the next year. So, if you want to go for a trip, plan it this year to reap the benefits of the staycation. Planning a trip and everything is easy, but the main thing is managing finances.

So, you can finance your next trip with the help of Instant Funding. We want you to have a great vacation at the best rates and also reap the benefits of the staycation tax credit. So, take a cash advance Canada loan from us, pack your stuff, and go for an amazing adventure in your home city. A thrilling adventure is just a few clicks away from you.