The high cost of living can be harsh in Ontario, especially for low-income to medium-income families.
According to CTV News, half of the 10 most expensive Canadian cities to rent a one-bedroom apartment are in Ontario.
If you factor in the cost of living and the housing prices, then Ontario as a whole is one of the more expensive provinces to live in.
The Ontario government tries to help through tax credit payments, one of which is the Ontario Trillium Benefit (OTB).
What Is the Ontario Trillium Benefit?
Ontario Trillium Benefit is a tax credit benefit paid out to Ontario citizens if they qualify for at least one of the following tax credits:
- Ontario Energy and Property Tax Credit (OEPTC)
- Northern Ontario Energy Credit (NOEC)
- Ontario Sales Tax Credit (OSTC)
Together, the three tax credits aim to pay back some of the costs associated with energy expenses, property tax, and sales tax that Ontarians pay. The OTB, a combination of three tax credits, is named after the three-leaf Trillium flower.
Ontario Energy and Property Tax Credit
The OEPTC is designed to pay back partial costs associated with the sales tax that low- to moderate-income Ontarians pay on their energy and some of their property taxes.
You might be eligible to receive the payment for OEPTC if you qualify for just one of the two components (i.e., property tax or energy sales tax).
Northern Ontario Energy Credit
Ontario has one of the highest energy costs in the country, which directly affects the cost of living and hits low- to moderate-income families the hardest. Northern Ontarians face even higher energy costs. So, the government offsets this expense to an extent, using the Northern Ontario Energy Credit (NOEC).
Ontario Sales Tax Credit
Ontarians pay a Harmonized Sales Tax (HST) of 13% on all their purchases. Like any other province, 5% of this tax goes to the federal government, whereas the remaining 8% stays with the state.
No matter the income status, everyone pays the HST on almost everything they purchase, so the Ontario government returns a bit of it to the low- to moderate-income families via the OSTC.
Who Qualifies for or Is Eligible for the Ontario Trillium Benefit?
Not every Ontarian qualifies for all three tax credits (and, therefore, the OTB). But you can claim the OTB if you are eligible for just one of the components.
OTB Qualification: Ontario Energy and Property Tax Credit Component
The qualification criteria for OEPTC tax credit is as follows:
- You are 18 years or older.
- You lived in Ontario on the last day of the year that you are applying, not applying for.
- You were or someone else was responsible for paying the rent or property tax of your principal residence.
- You or someone paid for your accommodation costs in a care facility.
- You or someone else paid for the energy costs for your principal residence.
The benefit is also available for students, provided they lived in the designated financial institute on the last day of the year that the benefit kicks in. The eligibility criteria for OEPTC are quite broad and apply to a significant number of Ontarians.
OTB Qualification: Northern Ontario Energy Credit Component
The NOEC is a location-specific benefit. You will be eligible for it if:
- You live in Algoma, Cochrane, Kenora, Manitoulin, Nipissing, Parry Sound, Rainy River, Sudbury, Thunder Bay, or Timiskaming.
- You are 18 years or older.
- You lived in Ontario on the last day of the year you are applying, not applying for.
- You or someone else was responsible for paying the rent or property tax of your principal residence.
- You or someone responsible paid for your accommodation costs in a care facility.
- You or someone else paid for the costs of electricity and heat in your principal residence.
Marital status doesn’t impact one’s eligibility for NOEC, although this benefit isn’t for people living as students in a designated educational institution.
OTB Qualification: Ontario Sales Tax Credit Component
The eligibility requirements for OSTC are a bit vague. Every 19-year-old (or older) citizen is eligible, and the tax credit benefit is paid for each adult and child in the family. The main factor in determining eligibility for Ontario Sales Tax Credit is income.
For 2019, you would have received full benefits if your income is:
- $24,115 or under as a single individual, or
- $30,143 if you are a single parent, married, or living in a common-law relationship.
The tax credit amount you qualify for is reduced by 4% for incomes above this threshold.
How Is Ontario Trillium Benefit Calculated?
You can calculate the OTB you might be eligible for quite easily using this online calculator.
Each component of OTB is calculated differently.
For Ontario Property and Energy Tax Credit, the maximum amounts you can get based on the year 2021-2022 are:
- $1,095 for Ontarians aged between 18 and 64
- $1,247 for Ontarians above the age of 65
- $243 for reserve or long-term care residents
- $25 for time spent living in a designated educational institution
Based on different scenarios that I ran on the calculator, the two most important variables used to calculate the OPETC amount are income and the amount you pay towards rent or property tax. The lower the income or the higher the rent or property tax you pay, the higher your OPETC would be.
For Northern Ontario Energy Credit, you can get a maximum of:
- $158 if you are single
- $243 if you are married or living with a common-law partner
The amount you can get is calculated mainly based on your income. You get flat out $158 for an income somewhere around $42,000 or less (based on different calculated scenarios). After that, you will start losing the NOEC amount as your income grows. The benchmark is higher for families.
The Ontario Sales Tax Credit is calculated based on your individual and family income. You get the maximum amount of $316 for each family member, provided your net adjusted income is below these thresholds:
- $24,115 if you are single with no children
- $30,143 if you are a single parent, married, or living with a common-law partner
How Much OTB Can You Get?
The total amount you can get in place of OTB depends on various factors, but most importantly, on these five considerations:
- Individual family income
- Marital status and children
- Whether or not you have rented property or pay property taxes and the amount you paid
- Region of residence
Northern Ontarian families with low income to moderate income will most likely be eligible for the maximum OTB amount you can get. It might be around $1,654 and more if you are married with kids.
What Is the Income Limit for Ontario Trillium Benefit?
There isn’t a clearly defined low-income threshold for the OTB. Since the benefit is made up of three tax credits, we could use the low-income threshold limit for that, but only the Ontario Sales Tax Credit has a clearly defined low-income threshold.
For the other two tax credits, the situation is a bit different. It’s safe to assume that an individual who is at or below the income limits defined for OSTC would be considered to have low income for OTB.
However, that alone is not the deciding factor. The most sizeable component of the OTB, the OEPTC, is not just calculated based on your family income but what you pay towards your rent or property tax.
How to Claim Ontario Trillium Benefit?
You can claim the Ontario Trillium Benefit by claiming the subsequent tax credits on your returns.
If you are eligible for the Ontario Energy and Property Tax Credit, you can claim it for the subsequent year (e.g., you can claim the tax credit for 2022 on your 2021 returns). It’s the same for the Northern Ontario Energy Credit. If you are eligible for both these tax credits, you can claim them by filling out the 5006-TG ON-BEN application.
You cannot apply for or claim the Ontario Sales Tax Credit. If you are eligible, the government will release the payment automatically based on the taxes you filed in the previous years.
Can You and Your Spouse Both Claim OTB?
The OTB payment is issued to only one of any couple, so if you or your spouse has already claimed OTB for the family, you don’t need to.
How and When Ontario Trillium Benefit Is Paid?
The payment frequency of the Ontario Trillium Benefit is based upon the amount you qualify for. If you qualify for $360 or more, you can choose the payment to be issued in either monthly installments or one lump-sum payment at the end of the period you are applying for.
This is one of the reasons why you might consider monthly payments instead. With monthly payments, you no longer have to wait for an entire year to receive your OTB payment.
If the amount is less than $360, then you will get one lump-sum payment at the beginning of the period you are applying for.
The payments are mostly issued on the 10th day of each month. However, based on certain exceptions, you might receive a payment on the 8th or 9th day of a month.
There is a payment amount threshold as well. If you qualify for an OTB amount between $2 and $10, you will be given $10 flat out. If you qualify for less than $2, you won’t get an OTB payment.
Ontario Trillium Benefit – Other Important Facts
There are a few other things you need to know:
- If you are receiving OTB benefits for OEPTC and NOEC, your eligibility will change if your address changes. It’s triggered based on where you live on the first of each month.
- If you qualify for monthly payments but choose to get a lump-sum payment, you can change your mind midway through the year. You can contact the Canada Revenue Agency (CRA) to start releasing your OTB payments monthly. The department will first clear the accumulated payment you would have gotten till that month (if you were receiving monthly payments) then start issuing monthly payments.
- OTB is tax-free income.
If you live in Ontario and your income can be categorized as low to moderate, then it would be a good idea to look into Ontario Trillium Benefit.
You might not qualify for the maximum benefit, but even a small monthly sum can help you with some of your expenses. And since the benefit is tax-free, it won’t add to your financial obligation towards the CRA.