Ontario Tax Reduction

This publication is provided as a guide only. It is not intended as a substitute for the Taxation Act, 2007.

Purpose of the Ontario Tax Reduction Program

Reduces Ontario income tax

The Ontario Tax Reduction (OTR) program eliminates or reduces Ontario income tax for lower income taxpayers. The program also provides additional tax relief for eligible individuals with dependent children 18 years of age or under, or with disabled or infirm dependants of any age. The OTR program is not a rebate program.

Eligibility

There is no specific dollar value for lower income. The tax reduction depends on factors such as the number of dependants in your family, their ages, and other deductions or credits to which you may be entitled.

How the program works

Basic reduction

If you were a resident of Ontario on December 31, you may be able to reduce or eliminate your Ontario tax by claiming the basic tax reduction.

Supplementary reduction for dependent children and for disabled or infirm dependants

You can also claim a supplementary reduction for each dependent child and for each disabled or infirm dependant. If you have a disabled or infirm child, you can claim both the dependent child reduction and the disabled or infirm dependent reduction for that child. Only one person can make a claim for each dependent child or disabled or infirm dependant.

Calculation

The basic reduction and any supplementary reductions are added together to calculate the total Ontario tax reduction available.

Who can claim the Ontario tax reduction

Individuals

You are eligible to claim the tax reduction if you file an income tax return and are subject to Ontario income tax. The claim is made on your last tax return for the taxation year.

Couples

For couples who were living together on December 31 of the taxation year, the person with the higher net income must claim the supplementary reductions for dependent children and for disabled or infirm dependants. For couples who separated during the taxation year, the person who received the federal Child Tax Benefit payment at the end of the taxation year should claim the tax reduction for that dependent child.

Claims for dependent children

A person you claim as a dependent child or a disabled or infirm dependant for federal income tax purposes, is considered a dependent child or a disabled or infirm dependant for the Ontario tax reduction program.

A tax reduction claim can be made for a child who turned 18 years of age during the year, or who died during the taxation year, provided the federal Child Tax Benefit payments were received for that child in the same year.

Death during the year

You can claim the tax reduction on a return for a person who died in the taxation year.

How to claim the Ontario tax reduction

What form to use

Calculate the Ontario tax reduction on the ON 428 Ontario Tax form included with the T1-General, T1-Special, T1S-A, and T1S-C federal income tax return packages.

No documents are necessary to support your claim.

More information

For information concerning federal income tax or to obtain the forms mentioned above, please visit the Canada Revenue Agency website at www.cra-arc.gc.ca.

To obtain the most current version of this publication, or additional information, visit our website at ontario.ca/finance and enter 585 in the find page field at the bottom of the webpage or contact the Ministry of Finance at:

• 1 866 ONT-TAXS (1 866 668-8297)
• 1 800 263-7776 for teletypewriter (TTY)