Make sure you claim the Ontario Trillium Benefit
Posted January 27th 2014
The Ontario Trillium Benefit has been around for a few years now. However, we suspect that not everyone is getting everything they are entitled to. Here is what you need know to make sure you are not short-changing yourself.
The Ontario Trillium Benefit consists of three components: the Ontario Sales Tax Credit, the Ontario Energy & Property Tax Credit and the Northern Ontario Energy Credit. The Ontario Sales Tax Credit and the Ontario Energy & Property Tax Credit evolved out of the refundable credits which used to be included in the tax refund. The Northern Ontario Energy Credit was introduced in 2010 to compensate for the higher home heating costs in Northern Ontario.
Ontario Sales Tax Credit
The Ontario Sales Tax Credit used to be targeted exclusively at lower-income taxpayers. However, with the introduction of the HST, its parameters were significantly expanded. The maximum annual entitlement is now $291 per family member. It is reduced by 4% of your family net income over $22,389 if you are single with no children or $27,986 if you are a single parent or married or living in a common-law relationship. Whether or not you get anything will therefore depend on the size of your family unit. For example, if you are a married couple with two children or a single parent with three children, your benefit will not be completely eliminated until you have family net income of $57,086 or more. However, the addition of another child would increase this threshold to $64,361.
In contrast, to the other two components, which are claimed on Form ON-BEN, it is no longer necessary to apply for the Ontario Sales Tax Credit. However, you must still file a tax return in order for the CRA to determine how much you are entitled to. If you will turn 19 before June 1, 2017, make sure you file a 2015 tax return. You will receive your first monthly payment for the month after you turn 19.
Ontario Energy & Property Tax Credit
The Ontario Energy & Property Tax Credit is based primarily on how much rent or property tax you pay. There is also a flat $224 to help with energy costs. The threshold and rate at which the credit is reduced depends not only on your marital status but also on whether or not you are a senior, so you really have to crunch some numbers to figure out whether you are going to get anything. However, a single parent with net income of $40,000 and paying rent of $1,200 per month would receive an annual entitlement of approximately $327.00. A senior couple with net income of $50,000 and paying property taxes of $2,000 would get $336.
Note that students who live in a student residence are limited to a claim of $25 for their occupancy cost, which will sharply reduce their entitlement. There are also special rules for claiming the energy component if you are a resident of a public long-term care home or your principal residence is located on a reserve. Although you will not receive anything based on your rent, you will still be eligible for the energy component.
If you want to apply for the OETC you must check Box 6118 on Form ON-BEN and enter your rental or property tax information on the back of the form.
Northern Ontario Energy Credit
The Northern Ontario Energy Credit is designed to compensate for the higher home-heating costs incurred by residents of Northern Ontario. The maximum annual entitlement is $145 for single taxpayers and $225 for couples and single parents. For single taxpayers, the credit is reduced by 1 per cent of adjusted net income over $39,179 and is therefore completely eliminated only when net income exceeds $53,679. For couples and single parents, it is reduced by 1 per cent of adjusted net income over $50,372 and is therefore eliminated only when net income exceeds $72,872.
In order to be eligible for this credit, you must have paid rent or property taxes on a principal residence in Northern Ontario or had accommodation costs in a public long-term care home in Northern Ontario. “Northern Ontario,” for this purpose, is everything north of Muskoka. If your principle residence was on a reserve in Northern Ontario, you will qualify as long as you incurred home energy costs.
If you want to apply for the Northern Ontario Energy Credit you must check Box 6119 on Form ON-BEN.
Delivery of the Ontario Trillium Benefit
If the combined benefit which you apply for on your 2015 tax return is $360 or less, you will get it in one lump-sum in July 2016. Otherwise it will be paid in monthly instalments from July 2016 to June 2017. You also have the option of waiting until June 2017 and getting it paid in one lump sum at that time. The government introduced this option after complaints from taxpayers who liked the old system where it was included in the tax refund. It is hard to imagine why anyone would want to receive it later rather than sooner, regardless of whether it is paid in a lump-sum. However, if that is what you prefer, check Box 6109 on your ON-BEN.
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