During the pandemic, we became accustomed to staying indoors and had to reflect on our travel options, as borders were closed, flights cancelled, and ports suspended. We started looking for ways to recreate the holiday experience from the comfort of our homes. As indoor tourism became permissible again, many of us felt excited to explore the world once more, while others still had reservations about the health risks of travel. Both young and old can support the revival of the tourism industry by taking advantage of staycation credits, which provide an affordable way to enjoy a holiday. This is a unique opportunity for us to start anew and evaluate our options.
What’s Staycation credit?
Staycation credit is a program that provides financial support to individuals who choose to take a staycation instead of travelling abroad for vacation. A staycation involves staying close to home and exploring new locations within your country or region. With staycation credit, you can receive discounts or other financial benefits when booking accommodations, transportation, and activities for your staycation. This allows you to save money while still enjoying the experience of travelling and discovering new places. The program encourages individuals to support their local tourism industry and explore their own backyard, which can help boost the economy and create jobs in the hospitality sector.
How the staycation credit operates?
The staycation credit is a simple and easy-to-use program. Beginning in 2022, residents can claim 20% of their qualified lodging costs for hotels, motels, cottages, and campers (including Airbnb) when filing their income tax returns. A single person can claim up to $1,000 in lodging costs for a maximum payment of $200, while a family can claim up to $2,000 for a maximum payment of $400. Families include spouses and common-law partners, but children are not eligible to claim the staycation credit. Tax credits can be refundable or non-refundable. If you are eligible for a refundable tax credit, you will receive the credit even if you have no tax liabilities, but this will only result in a tax debt of zero.
What are the eligibility criteria for the staycation credit program?
As per the government, to be eligible for the credit, one must be a Canadian resident as of December 31, 2022. Any of the following expenses are acceptable, provided that all other requirements are met:
- Reservations are made through an online website or directly with the lodging provider.
- Lodging expenses for one or more trips are up to a maximum of $1000 for single travelers and $2000 for families.
- The cost of the hotel and travel package.
- The amount paid to enter the lodging is a portion of the total cost.
- Keep detailed receipts for claiming the credit.
- Other criteria include the location of the accommodation, the total cost of the stay, the amount of GST or HST paid, the start date of the stay, and who made the full payment.
The Staycation Tax Credit covers expenses for lodging incurred during short-term stays or camping for leisure purposes, which includes but is not limited to:
- Hotels
- Motels
- Resorts
- Lodges
- Accommodation and breakfast
- Cottages
- Campgrounds
- Vacation rental properties
In summary,
A staycation is a vacation taken near one’s home, allowing for new experiences without the need for extensive travel. The staycation tax credit, announced in 2022, enables residents to claim 20% of qualified lodging costs on their income tax returns. Eligible expenses include hotels, motels, resorts, lodges, bed and breakfasts, cottages, campgrounds, and vacation rental properties. Single individuals can claim up to $1,000 in lodging costs for a maximum payment of $200, while families can claim up to $2,000 for a maximum payment of $400. Children are not eligible for the staycation credit. Overall, this blog provides important information on what the staycation credit is, how it works, and the eligibility criteria.