As the year is coming to a close, it is a good time to gather your paperwork and organize receipts so you aren’t rushing to do this for your next tax return in the new year. I have been preparing income taxes over the past three seasons and while that may not be a long time in the tax preparation world, what I find amazing is the number of people that do not track their property tax or rental receipts on their income tax returns. They do not think of claiming rent as an option. This is an integral part of your Ontario Trillium Benefit refund that you should be taking advantage of.
The Ontario Energy and Property Tax Credit is the section that is part of the Ontario Trillium Benefit you are entitled to every year if you are a property owner or a renter. If you don’t claim this benefit, you will get the Ontario Sales Tax Credit. By claiming your property tax/rent, you get BOTH the Ontario Sales Tax Credit and Ontario Energy and Property Tax Credit. This could be an extra $500-$993 per year (depending on your income level and personal situation) in your back pocket!
So you may wonder, “How much can I receive?” “How do I qualify?” “How do I get this credit?”
How much you can receive for 2016 will be updated in the new year and you can see that benefit on the Ministry of Finance website. For 2015, you could get
- up to $993*if you are a non-senior ($772* to help with property taxes and $221* to help with sales tax on energy)
- up to $1,131*if you are a senior ($910* to help with property taxes and $221* to help with sales tax on energy)
- up to $221*if you live on a reserve or in a public long-term care home
- $25 for the time you lived in a designated college, university or private school residence in 2014
To qualify, you need to be a resident of Ontario by the end of the tax year. Since tax season is around the corner, you would qualify on your 2015 tax return if you live in Ontario on Dec 31st this year. The following rules are in place as listed on the Ontario Ministry of Finance website:
- rent or property tax for your principal residence was paid by or for you for 2015
- you lived in a student residence
- you lived in a long-term care home, or
- you lived on a reserve and home energy costs were paid by or for you for your principal residence on the reserve for 2015, and
- at the beginning of the payment month, you are:
- a resident of Ontario, and
- 18 years of age or older, or have or previously had a spouse or common-law partner, or are a parent who lives or previously lived with your child.
These rules and other useful links can be found directly on the ministry of finance website here
To get the credit, you apply for it on the ON-BEN form when you complete your taxes. If you have someone preparing your taxes, they will apply for this credit for you. Generally, they will ask for the amount of what you paid on your property tax bill. You can bring them your yearly statement (summary) or give them the amount to input. For renters, be sure to have your landlord give you a rent receipt, either month by month or for the whole year. It can be a receipt book or the landlord can print off a statement summarizing what you paid him/her in 2015. Be sure they sign and date this form. Your tax preparer will input the total rent amount for 2015 on your behalf on the ON-BEN form. This form is included in your general income tax package that will be sent to the CRA. Remember, it your responsibility to gather the receipts/statements for property tax or rent and to give accurate information to your income tax preparer so that the CRA gets the correct information.
IMPORTANT NOTE: Just like GST/HST, you can qualify for this payment EVEN if you do not owe/receive any income tax. This is why it is so important to file your income tax every year because you don’t want to miss out on the benefits.
The deadline for filing is April 30th. If you file late, payments may be delayed. The Ontario Trillium benefit will show up to your bank account on the 10th of every month beginning in July of that tax year if you are to receive more than $360. You have the option to receive it in one lump payment (For 2016 filers, you would not receive the lump payment until June of 2017. Alternatively, if you receive less than $360, you would get a single payment in July of 2016.
Direct Deposit: Most filers have direct deposit set up with the CRA and by 2017 this will be mandatory for all Canadian income tax filers. Please note for quicker payment of benefits or income tax refunds, it is recommended you set up direct deposit with the CRA as opposed to traditional mailout. See your tax preparer/accountant for details.
At Debits & Credits, we are here to help you with your tax return. We can help with any kind of tax returns ranging from student/personal to small business/corporate. If you have any questions about preparing your tax return this year, needing to get your taxes done or any other general tax inquiries, give us a call! That’s what we’re here for.
We also provide other services such as accounting and bookkeeping services for businesses. Call our number at 705-735-0022 for a no charge consultation. Remember the idea is to grow your business, not your workload!