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Helping Ontario Families Through Tax Breaks

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Helping Ontario Families Through Tax Breaks

Ministry of Finance

The government of Ontario offers several tax credits that put money back into the pockets of those who need it most. Tax relief for Ontario families makes their lives a little easier.

PERMANENT INCOME TAX CUT

As part of Ontario's Tax Plan for Jobs and Growth, income tax cuts came into effect in January 2010. These cuts have lowered income taxes for 93 per cent of Ontario income tax payers. Those getting a tax cut will save an average of $200 per year.

CHILDREN'S ACTIVITY TAX CREDIT

A new Children's Activity Tax Credit (CATC) has been proposed to help parents with the cost of enrolling their children in activities that encourage them to be healthy and active. This would be the only tax credit in Canada provided for a wide range of children's activities, such as sports, music lessons, language classes and dance.

Parents and guardians can claim up to $500 in eligible expenses for a credit up to $50 per child under 16 years of age, or up to $100 for a child with a disability under age 18. Unlike the federal children's fitness tax credit, Ontario's proposed credit would be refundable so people would qualify as recipients even if they pay no income tax. This would allow more lower-income families to benefit.

The CATC would provide more than $75 million to 1.8 million children in about 1.1 million Ontario families each year.

ONTARIO ENERGY AND PROPERTY TAX CREDIT

The government has proposed to provide additional relief for the sales tax on energy and for property taxes through the enhanced Ontario Energy and Property Tax Credit (OEPTC).

The government introduced legislation in September that would increase the amount seniors can earn and still be eligible for the OEPTC, making 50,000 more seniors eligible for this credit, and providing increased relief to about 690,000 seniors.

The proposed OEPTC would provide up to $1,025 for an eligible single senior or senior couple to help them with the sales tax on energy expenses and with their property tax.

The enhanced credit would deliver almost $1.3 billion in annual support, an increase of $525 million compared to the property tax credit provided in 2009.

ONTARIO SALES TAX CREDIT

The Ontario Sales Tax Credit (OSTC), introduced in the 2010 Budget, helps low-to-middle income individuals and families -- including seniors -- by providing tax relief on the sales tax they pay.

The OSTC provides up to $260 per person in a family, to about 3.1 million Ontario families and individuals. The amount received depends on a family's size and adjusted net income. For 2010, the income level at which the credit will begin to be reduced is $20,000 for single people and $25,000 for couples and single parents. The credit will be reduced by four per cent of adjusted family net income over these income limits.

While Ontario funds the program, the Canada Revenue Agency administers it through the personal income tax system. The OSTC payments are issued in four instalments annually. The next payments will be issued on February 10, 2011 and May 10, 2011. The OSTC will provide sales tax relief of more than $1 billion per benefit year.

NORTHERN ONTARIO ENERGY CREDIT

A new Northern Ontario Energy Credit (NOEC) is helping people in northern Ontario with the higher energy costs they face. This credit provides up to $130 for a single person and up to $200 for a family (including single parents).

For the first year, this credit is being paid in two instalments, in November 2010 and February 2011. Starting in July 2011, the NOEC would be paid in four instalments per year.

Through the NOEC, the government will provide northern Ontarians with roughly $110 million in energy credits over the next three years.

ONTARIO CHILD BENEFIT

The Ontario Child Benefit (OCB), introduced in 2007, provides financial support for all low- to moderate-income families to help with the cost of raising children. The OCB reaches more than one million children each month. Payments are based on the number of children under age 18 and adjusted family net income.

In July 2009, the OCB was increased from a maximum of $600 to $1,100 annually per child, two full years ahead of schedule.

The Ontario Poverty Reduction Strategy committed the government to increasing the maximum OCB to $1,310 annually per child by December 2013.  This commitment was confirmed in the 2009 and 2010 Ontario Budgets.  This enhancement to the OCB would benefit all current OCB recipients and provide payments to an additional 100,000 children.

ONTARIO SENIOR HOMEOWNERS' PROPERTY TAX GRANT

The Ontario Senior Homeowners' Property Tax Grant, introduced in 2008, is an annual amount provided to help senior homeowners with low-to-middle income pay their property taxes.

The maximum amount a senior homeowner can receive has been increased to $500 for 2010 and beyond from $250 in 2009. Through this grant, the government is providing $1 billion over the next five years to more than 600,000 senior homeowners.

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