New Tax Incentive for Spending Vacations in Ontario

The Waterloo Region tourism industry joins others across the province in welcoming Ontario’s 2022 Staycation Tax Incentive. This temporary tax credit aims to encourage families and individuals to explore the province, and aid the tourism and hospitality industry recover from the impact of COVID-19. Ontarians are eligible to claim the tax credit if they were an Ontario resident on Dec. 31, 2022. Eligible children are not entitled to claim the credit on their personal Income Tax and Benefit Return for 2022 but residents who do not have spouses or common-law partners are eligible to claim their own expenses for the credit.

For the 2022 tax year, Ontarians who vacation within the province may be eligible to receive a 20 per cent tax break. The Ontario Staycation Tax Credit allows for a 20 percent return on accommodation expenses. Individuals are eligible for up to $1,000 in total returns and $2,000 for families. The tax credit is estimated to provide $270 million in support of about 1.85 million Ontario families and individuals.

When all other conditions are met, residents are able to claim an accommodation for a single or multiple trips一up to the maximum expense limit of $1,000 as an individual or $2,000 as a family, accommodations booked either directly with the provider or through an online third-party platform, the portion of an expense that is necessary to have access to the accommodation, and the accommodation portion of a tour package expense. 

Minto Schneider, CEO of Explore Waterloo Region and has worked with the organization for nine years. She said that the organization has helped promote tourism with the Tourism Industry of Canada and they want to encourage people to experience the outdoors and accommodations that Ontario has to offer. 

“We have been running an explore more campaign, which encourages people to stay 2 nights, and when they do that they get a $100 gift card to spend in the region. Because of the recent restrictions we have put a pause on the campaign but will be reintroduced in March,” Schneider said.

“We’re [Waterloo] so well known for the universities and being a tech city, but there are so many other things to do. We have amazing nightlife (when it’s open), we’re surrounded by rural communities and farmland. We have so much to offer,” Schneider said.

Short-term accommodations generally do not include timeshare agreements or a stay on boats, trains, or other vehicles that can be self propelled. The tax credit only applies to leisure states between Jan. 1, 2022 and Dec. 31, 2022 regardless of the timing of payment for the accommodations. This credit does not apply to business travel.

In order for residents to claim the tax credit, accommodation receipts must be saved. The receipt must include the following information一the location of where you stayed, the amount, the tax paid, the date of stay, and the name of the payor. 

The Waterloo Region Tourism industry has much to offer year-round, especially during the winter months. The Staycation tax benefit allows for credit on short-term and/or camping accommodations. These include hotels, motels, resorts, cottages, and lodges. The tax credit applies to vacation stays between Jan. 1, 2022, and Dec.31, 2022, regardless of the timing of payment for the stays. 

“At this time I would say skiing, tubing, skating. Anything outdoors is great! Also, the St. Jacob’s Market is a great place to go shopping,” Schneider said.