Ontario Tax Reduction

What’s in this article?

 

What is this?

The Ontario Tax Reduction is a non-refundable tax credit for lower income taxpayers and families to help reduce or eliminate any Ontario tax payable.

The amount of your Ontario tax reduction is based on your income tax payable, the number of dependent children you have that are 18 years or under, and the number of dependants of any age that have a mental or physical infirmity.

 

Am I eligible?

You may be eligible for the Ontario tax reduction if you were a:

  • Resident of Ontario on December 31; and
  • Resident of Canada at the beginning of the year

If you had a spouse or common-law partner on December 31st the one with the higher net income must make the claim.

 

Ontario Government says

You cannot claim the tax reduction if you were not a resident of Canada at the beginning of the year or were subject to the Ontario additional tax for minimum tax purposes.

If you and your spouse separated this year, the parent receiving the federal child tax benefit should claim the reduction for the children.

If both parents receive the federal child tax benefit in the year, the parent receiving the higher amount of the federal child tax benefit should claim the reduction for the children.

If both parents receive equal amounts of the federal child tax benefit in the year then the parent with the lower income should claim the reduction for the children.

 

Where do I claim this?

H&R Block’s tax software automatically calculates the Ontario Tax Reduction amount and applies it on your return, provided you meet the eligibility requirements for the tax credit. You can see the applied amount on the Optimization page under the WRAP-UP tab.

 

Where can I learn more?