If you’re a resident of Ontario and have already started doing your taxes, you may have already noticed a new tax credit is in town. It’s called the Staycation Tax Credit, and it’s just as amazing as it sounds.
What is it?
The Ontario Staycation Tax Credit is a temporary credit for 2022. The credit was meant to help Ontario families continue to explore the province and boost the economy in the wake of COVID-19 pandemic restrictions.
Through the credit, Ontarians can claim 20% of their 2022 accommodation expenses on their tax returns for 2022. This can amount up to $1,000 as an individual or $2,000 with a partner. This would amount up to $200 per individual, or up to $400 as a family.
What expenses include and what they don’t
To know what you can claim under the new credit, Ontario residents should first be aware of what’s actually eligible. It’s important to note first that your stay must be for leisure purposes and for less than a month’s time in Ontario.
Furthermore, this is for accommodation purposes only. Still, as the Ontario government website states, these are the properties included for eligibility:
- hotel
- motel
- resort
- lodge
- bed-and-breakfast establishment
- cottage
- campground
- vacation rental property
Finally, this is only for Jan. 1, 2022, to Dec. 31, 2022. So, make sure this falls within the timeline before claiming your cash. You’ll have to have a receipt available with all details of your stay provided. And again, this is for accommodation only. You can’t try and claim all the food you ate at a bed and breakfast, for example, or a car you had to rent to get there. Whatever you claim, it will come out as a tax credit on your return, which could then push you towards a refund!
Don’t spend it all in one place!
Well, actually, you might want to invest it all in one place: your Tax-Free Savings Account (TFSA). The TFSA is a perfect spot to put this cash aside. By investing it, you may be able to pay for yet another staycation in 2023 and claim this credit again should it be provided next year!
If that’s the case, a strong option for this year could be Canadian Tire (TSX:CTC.A). Canadian Tire stock continues to perform well even during this downturn, with less-expensive options, plenty of products in warehouses, and an expanding business.
The company still trades in value territory at just 9.77 times earnings and provides a 4.06% dividend yield as well! Plus, shares are on par with where they were a year before but up 17% in the last three months. So, it could be an excellent time to jump on the rebound train and soar into 2023 strong.
Bottom line
It’s always important to make sure you claim everything you can on your tax return. You could be missing out on hundreds, if not thousands, in credits and benefits if you don’t check it all out beforehand. Luckily, there are plenty of online filing options that will walk you through the process, allowing you to use everything available today.
