Ontario tax is the provincial portion of your personal income taxes. It is calculated separately from your federal income tax, and is based on your income tax bracket. Effective January 1, 2010, the tax rate on the first tax bracket was cut by one percentage point, from 6.05 per cent to 5.05 per cent. Ontario tax also includes the Ontario Health Premium.
For people living in Ontario, three Ontario forms are of interest as part of your federal (T1) income tax return:
- ON428 Ontario Tax
- ON479 Ontario Credits
- ON-BEN Application for the 2011 Ontario Senior Homeowners' Property Tax Grant, the 2011 Ontario Energy and Property Tax Credit, and the 2011 Northern Ontario Energy Credit
Ontario Tax Credits
You can reduce the amount of Ontario tax you pay by claiming tax credits when you file your income tax return. Ontario Tax Credits provide tax relief for people with low- to middle-incomes.
There are two types of credits: non-refundable tax credits and refundable tax credits.
Non-refundable tax credits
Ontario has its own non-refundable tax credits similar to federal non-refundable tax credits, although the amounts may differ. For example – Adoption Tax Credit, Disability Tax Credit, and Caregiver Tax Credit. The rules for claiming these credits are the same as the rules for the federal tax credits. You claim the non-refundable tax credits on your ON428 Ontario Tax form.
Refundable tax credits
These credits give you a refund, even if you do not owe any Ontario tax. Refundable tax credits include the Ontario Energy and Property Tax Credit and Ontario Children's Activity Tax Credit. There are a few others, including the Ontario Political Contribution Tax Credit. You claim these refundable tax credits on your ON479 Ontario Credits form.
For 2010 onward
The Ontario Property and Sales Tax Credits have been replaced by two separate credits: the Ontario Sales Tax Credit and, the new refundable Ontario Energy and Property Tax Credit.
The information you give on your personal income tax return will determine the amount of the Ontario Sales Tax Credit you will receive. To apply for the Ontario Sales Tax Credit, answer yes on your personal income tax return to the question "Are you applying for the GST/HST credit or the Ontario Sales Tax (OST) credit?" found on page 1. The Ontario sales Tax Credit will be paid in four quarterly instalments during the year; August, November, February and May.
You can claim the 2010 Ontario Energy and Property Tax Credit by completing Form ON479 when you file your personal income tax return. For 2011 and subsequent years, the credit will be paid in four instalments during the year, instead of at the end of the year after you file your personal income tax return. To receive payments, you must complete the ON-BEN form, included in the T1 General income tax package, when you file your personal income tax return.
The Northern Ontario Energy Credit (NOEC) is designed to help low- to middle-income families and individuals in the north with their energy costs. For 2010, the NOEC will be administered by the Ontario Ministry of Finance. The 2010 credit is payable in two equal instalments: the first in November 2010, and the second in February 2011.
For 2011 and subsequent years, the NOEC will be administered by the Canada Revenue Agency. For 2011, the NOEC will be combined with the Ontario Energy and Property Tax Credit and paid in July 2011, December 2011, March 2012 and June 2012.
For 2012 and beyond, the combined payments will be paid quarterly each September, December, March and June. To receive payments, you must complete the ON-BEN form, included in the T1 General income tax package, when you file your personal income tax return.
Eligibility
To be eligible to claim Ontario Tax Credits you must:
- be an Ontario resident
- have lived in Ontario on December 31
- file a federal income tax return for that year
Please see each individual credit for additional eligibility criteria.
If you have a spouse or common-law partner, there are special conditions which apply to each Ontario Tax Credit.
