Can You Get a Tax Credit For Your Staycation?

If you live in Ontario, you may be able to save money on that summer road trip or weekend getaway.

Two years into the COVID-19 pandemic, Canadians have mixed feelings about long-distance travel. Some are more than ready to hop on a plane and head for their favourite cruise ship or oceanfront resort, while others are more comfortable staying close to home for a little while longer. Both of these approaches are valid—as long as your vacation doesn’t involve a booze-fueled party plane to Cancun—but the Ontario government has made it clear that it wants residents to spend money within the province in the months to come. As an incentive to explore the attractions in their own back yards in 2022, residents are being offered the Ontario Staycation Tax Credit. Here’s how it works.

What is the Ontario staycation tax credit?

The Government of Ontario recently announced a temporary tax credit designed to encourage local travel and support the tourism and hospitality sectors, as these industries have faced countless challenges and setbacks over the past two years. With this tax credit, Ontario residents can claim 20 per cent of eligible accommodation expenses with a limit of $1,000 for individuals and $2,000 for couples and families. There are some restrictions—the accommodations cannot be long-term, part of a timeshare or involve a motor vehicle like an RV—but the tax credit applies to hotel, motel, campground, cottage, bed-and-breakfast, lodge and resort stays between January 1 and December 31, 2022.

Who is eligible for the Ontario staycation tax credit?

If you live in Ontario, you’re in. The criteria is simple—you just have to be a resident of Ontario on December 31, 2022 to be eligible to claim this tax credit. While this benefit is unique to Ontario at the moment, it’s possible that other provinces will follow suit. In fact, a similar rebate was proposed in Alberta last year.

Getting your refund will take some time, but it’s fairly straightforward. Save all of your receipts and when it’s time to file your 2022 personal income tax return next spring, you’ll be able to claim the staycation tax credit. Your records should include the location of your accommodations, the claimable amount and GST/HST paid, plus all relevant dates and payor information.

While you can claim accommodation expenses for the entire family, only one credit can be claimed per household. This means that if you travel with your spouse and kids, you’ll need to decide which adult claims the credit come tax time.

Ontario staycation tax credit - Niagara FallsPhoto: Shutterstock

So, where should I go?

Ontario is a huge province, and before the great blue licence plate debacle of 2020, it was deemed “yours to discover.” That’s still true, with more than a million square kilometres of cities, towns, lakes and green spaces to explore. You may even want to take more than one trip!

If you live in the GTA, you might start with these easy day trips from Toronto before venturing further afield to discover Ontario’s greatest hidden gems. Craving sweet treats? Follow road trip routes dedicated to Ontario’s best butter tarts and apple pies. And no matter how many times you’ve visited, there’s always something new and exciting to experience in Niagara Falls.

For extended staycations, consider a trip to beautiful Manitoulin Island or French River, or head north of Superior to take in the spectacular natural beauty of Algoma Country. You can also visit scenic areas like Muskoka, the Kawarthas, Georgian Bay or Kincardine, or spend a weekend playing tourist in Collingwood. If you like camping, start your vacation planning by exploring the Ontario Parks or KOA website.

No matter where you choose to roam, there’s plenty to see and do in Ontario—and now, you’ll enjoy a bit of cash back in your pocket.

Next, check out the best day trips from London, Ontario.

Balaclava Ontario Ghost TownPhoto: Ddeyell via Wikimedia Commons

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