The Ontario 2022 Staycation Tax Credit

To travel or not to travel… that is the question.

With COVID-19 still looming about, many of us have been reluctant to get on an airplane or do any sort of meaningful, long-distance travelling.  While some of us are still fine with air travel currently, others like myself feel reluctant as I always seem to get minor colds or bugs travelling on a plane, to begin with.

Sitting for hours in a stuffy, recycled-air-filled fuselage is not in the cards right now.
Throw COVID into the mix, and no thanks!

Not to mention, many young families who wish to travel may still be uncomfortable jet setting with unvaccinated children in tow.  Complicated scenarios like this seem to be the norm currently.  So what can we do to get out of our houses for a bit and itch that travel bug without the hassle of an airport?

#Staycation

Well, one option, particularly if you live in the province of Ontario, is to go on a “Staycation.”  We often don’t consider the great size and expanse of the provinces we live in, and all of the tourism opportunities that are right in our own backyard.

So why a staycation? Well, the government of Ontario recently introduced a temporary tax credit for 2022 to incentivize travel within the province.  The goal is to support our tourism and hospitality sector, which has been hard-hit by closures and restrictions during the pandemic, while at the same time promoting tourism to Ontario residents within their own province.

You’ll potentially get a bit of money back if you’re an Ontario resident by vacationing within the province. At the same time, you’ll be supporting the local economy by having the added incentive to spend money at local businesses.

Many of us don’t think about vacationing near our homes, we forget that Ontario has a lot to offer.  Hopefully, this will get people looking at a map and considering having a second look at some home-grown #staycation options.

So What’s the Deal?

To promote travel within the province, the Government of Ontario is offering its’ residents the ability to claim 20% of their eligible 2022 accommodation expenses up to $1,000 for an individual or $2,000 with a spouse, common-law partner or eligible children.  The temporary tax credit would be claimed on your personal tax return in 2022 and by a single family member.

So what does this mean in plain English? It means that you get a 20% rebate on your eligible accommodation spending as an individual up to $1,000 (so a maximum credit of $200) or you can claim 20% of $2,000 as a family (maximum credit of $400).

If you were already planning on renting a cottage in Ontario, going to a ski chalet, hitting the campground this summer or staying at a hotel perhaps, then you’re in luck – this is a great bonus!

That family vacation at the Lakefront resort for $2,000/week, would only cost you $1600!
Here are a couple quick examples:

What are eligible Expenses? Can I Claim this?

The Ontario Staycation tax credit is intended for short-term stays of less than 1 month in Ontario.  So no, don’t try to get a rebate on a month’s worth of rent.

Examples of short-term accommodations include:

• Hotels
• Motels
• Resorts
• Lodges
• Bed and Breakfast Establishments
• Cottages
• Campgrounds

Examples of accommodations NOT eligible:

• Timeshares
• Boat Rentals
• Train / Rail
• Self-propelled Vehicles or Vessels

(So this seems to imply you cannot rent an RV or a Sailboat for 3 weeks and claim a tax credit.)

Things to Note:

• Short-term accommodations eligible for the tax credit must be between January 1st and December 31st of 2022 (your time of stay – not the date of payment).
• This does not apply to business travel (eg. reimbursed by your employer)
• Accommodations must be paid for by you or your eligible family member
• The expense must be subject to GST/HST and include a detailed receipt
• The expense cannot be reimbursed by friends/family or otherwise. (eg. you can’t rent your parents cottage and have them pay you back)
• Accommodation can be claimed for single or multiple trips up to the limits per individual or family
• Accommodation must be booked directly with the provider or through an online platform
• You may also claim any portion of the expenses that are necessary to have access to the accommodation
• If you are paying for a “tour package” you can claim the accommodation portion

How to Claim and Things to Remember!

So what do you need to keep the government happy when claiming your Ontario #staycation tax credit?

You will need to keep receipts of your accommodation or related expenses that must include at least all of the following details:

• location of the accommodation (proof that it is located in Ontario obviously)
• amount of the accommodation portion of the expenses
• the amount of GST/HST paid
• Date(s) of your stay(s)  (must be within the calendar year of 2022)
• Name of the person who paid the bill

This seems like a bit of a list, but any standard accommodation invoice or receipt should have all of this information.  However, if you are staying at a smaller or family-run accommodation such as a bed & breakfast or rental cottage, you will want to ensure you have a proper receipt as supporting documentation for your records.

Your accommodation expenses can be claimed on your 2022 personal income tax return.  The Ontario Staycation Tax Credit is a refundable personal income tax credit.  This means you can still receive the credit even if you don’t owe income tax in 2022, the rebate is not based on your income or income amount.

Happy travelling!

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