Ontario offers several refundable tax credits designed to support individuals, families, and businesses by providing financial relief in key areas such as child care, housing, and business innovation. These credits are designed to reduce the financial burden for eligible taxpayers, and they are refundable, meaning that even if no taxes are owed, the individual or business can still receive a refund. In this guide, we’ll break down the most common refundable tax credits available in Ontario, including eligibility requirements, application processes, and the potential benefits one can receive.
| Tax Credit | Eligibility | How to Apply | Amount/Benefit |
| Ontario Trillium Benefit (OTB) | Low-to-moderate-income households to help with energy costs, property taxes, and sales tax. | Apply via annual tax return, automatic for eligible taxpayers. | Up to $1,121 (depends on personal situation). |
| Ontario Child Benefit (OCB) | Low-to-moderate-income families with children under 18. | Automatically applied if you qualify for the Canada Child Benefit. | Up to $1,690 per child annually. |
| Ontario Senior Homeowners’ Property Tax Grant | Low-to-moderate-income senior homeowners. | Included in tax returns; must meet income requirements. | Up to $500 for eligible seniors. |
| Ontario Innovation Tax Credit (OITC) | Small and medium-sized businesses conducting R&D. | Claimed through corporate tax returns. | 10% refundable tax credit for eligible R&D expenditures. |
| Ontario Apprenticeship Training Tax Credit (ATTC) | Employers hiring apprentices in eligible skilled trades. | Claimed through corporate tax returns for apprenticeship programs. | 35%-45% of eligible apprentice salaries. |
| Ontario Job Creation Investment Fund | Employers creating jobs in strategic sectors. | Claimed through tax returns, additional documentation may be required. | Varies depending on job creation and investment level. |
| Ontario Film and Television Tax Credit (OFTTC) | Production companies producing films or TV shows in Ontario. | Claimed through production-related tax filings. | 35% of eligible Ontario production expenditures. |
| Ontario Co-operative Education Tax Credit (CETC) | Businesses hiring students from post-secondary co-op programs. | Apply via business tax filings with documentation on co-op positions. | 25%-30% of wages paid to co-op students. |
| Ontario Small Business Support Grant | Small businesses facing operational restrictions (e.g., COVID-19). | Application details provided during grant period. | Varies depending on circumstances and government guidelines. |
| Ontario Community Housing Renewal Strategy Tax Credit | Developers or entities building/maintaining affordable housing. | Apply through tax returns or via relevant affordable housing programs. | Varies depending on project size and scope. |
Maximizing Your Refundable Tax Credits
To make sure you’re getting the full benefit from Ontario’s refundable tax credits, it’s important to follow some key tax strategies:
- Stay Organized: Keep records of all your expenses and documents relevant to tax credits throughout the year. For example, receipts for rent, utility bills, and childcare expenses are crucial.
- File Taxes on Time: Many refundable tax credits are accessed automatically when you file your annual tax return. Filing on time ensures you don’t miss out.
- Check Eligibility Every Year: Eligibility criteria and your personal situation (income, dependents, etc.) can change annually. Always review whether you still qualify for the credits you’ve claimed before.
- Professional Advice: Consult with a tax advisor or use tax software to ensure that you’re taking advantage of all available credits.
- Review Past Returns: If you missed claiming a credit in previous years, you can request a reassessment to get retroactive benefits, sometimes up to 10 years.
Frequently Asked Questions (FAQs)
Can I claim multiple refundable tax credits?
Yes, you can claim multiple refundable tax credits as long as you meet the eligibility requirements for each one. For example, you can claim both the Ontario Trillium Benefit and the Ontario Child Benefit on the same return.
What happens if I miss applying for a refundable tax credit?
If you realize after filing that you missed claiming a refundable tax credit, you can file an adjustment request with the Canada Revenue Agency (CRA) using their “My Account” portal or by submitting a paper form.
How do I apply for these credits?
Most refundable tax credits are automatically calculated and applied when you file your income tax return, provided you meet the eligibility criteria. However, for certain business-related credits, you may need to fill out additional forms with your tax return.
Will refundable tax credits affect my refund?
Yes, refundable tax credits can increase your tax refund. If the credits exceed your taxes owed, you will receive the remaining amount as a refund. For example, if you owe $100 in taxes but qualify for $300 in refundable credits, you’ll get a $200 refund.
Do I need to live in Ontario for the whole year to qualify?
Generally, yes. You need to be an Ontario resident for at least part of the year to claim Ontario-specific refundable credits. Specific rules may apply to each credit, so it’s important to check the criteria for each.
Impact on Tax Returns
Refundable tax credits can have a significant positive impact on your tax return, especially if your income is low to moderate. Unlike non-refundable tax credits that simply reduce the amount of tax you owe, refundable tax credits can provide a refund even if you owe no taxes at all.
Here’s how refundable tax credits affect your return:
- Offsetting Taxes Owed: If you owe taxes, refundable tax credits will first apply to reduce the amount you owe. For example, if you owe $500 in taxes and qualify for $700 in refundable credits, the credits will reduce your taxes to $0 and you’ll receive the remaining $200 as a refund.
- Receiving a Refund: If you don’t owe any taxes, the full amount of the refundable credit will be issued to you as a refund.
- Filing Your Return: It’s crucial to ensure all relevant refundable credits are listed on your tax return, whether you file online or use a tax professional. Credits such as the Ontario Trillium Benefit or the Ontario Child Benefit are automatically calculated when you file your return, but business or production credits might require additional forms.
