Over the last few months, you may have noticed payments going into your account for the Ontario Trillium Benefit (OTB).
The OTB began in 2012, but there’s often some misunderstanding about what it is for and how it is calculated. Today, Koroll & Company is going to help clear up four of the most commonly asked questions about the OTB.
What is the OTB?
The OTB is a tax-free benefit for low- or moderate-income families and individuals to help pay for energy costs, sales tax and property tax.
The OTB is made up of three credits – Northern Ontario Energy Credit, Ontario Property Tax and Energy Credit and the GST/HST Sales Tax Credit. To receive the Ontario Trillium Benefit, you must be eligible for one or more of these credits.
How do I apply for the OTB?
To get the OTB you must file your annual income tax return, regardless of whether you made income, and complete the ON-BEN Application Form. If you do not file your tax return, you will not receive the monthly installments of any benefits you are otherwise eligible for.
In addition, you must meet the necessary eligibility for the credits you are applying for.
1. Northern Ontario Energy Credit
The Northern Ontario Energy Credit is a tax-free benefit paid to Northern Ontario residents to help offset higher energy costs.
Eligibility Requirements:
To receive this portion of the OTB, you must:
- Have a main residence in Algoma, Cochrane, Kenora, Manitoulin, Nipissing, Parry Sound, Rainy River, Sudbury, Thunder Bay, or Timiskaming.
- Be 18 years or older, have had a spouse or common-law partner, or be a parent who lives with or previously lived with your child.
- Paid property tax for your main residence, rented, lived on a residence and paid for home energy costs, or lived in and paid for a portion of public long-term care home accommodations in the previous year.
Your eligibility may change from month to month depending on where you live in the current year on the first of the month. For example, if you moved from Algoma to Barrie on November 1 - you will no longer receive your monthly payment for this portion of the OTB, going forward.
2. Ontario Energy and Property Tax Credit
Unlike the Northern Ontario Energy Credit, the Ontario Energy Credit is available to anybody who lives in Ontario, including those who are already eligible for and receive the Northern Ontario Energy Credit, and provides relief to taxpayers for property taxes and the sales taxes paid on energy.
Eligibility Requirements:
To receive this portion of the OTB, you must:
- Be 18 years or older, have had a spouse or common-law partner, or be a parent who lives with or previously lived with your child.
- Paid property tax for your main residence, rented, lived on a residence and paid for home energy costs, or lived in and paid for a portion of public long-term care home accommodations in the previous year.
Similar to the Northern Energy Credit, eligibility is based on where you live on the first of each month. If you move out of province you will no longer receive your monthly payment.
3. Ontario Sales Tax Credit
The third and final portion of the OTB was implemented to help offset the costs of sales tax paid.
Eligibility Requirements:
To receive this portion of the OTB, you must be 19 years or older, have had a spouse or common-law partner, or be a parent who lives with or previously lived with your child.
How much will I receive?
The amount you will receive is dependent on which credits you are eligible for, your net income, where you live, how much you pay in rent or property tax and your family’s size.
Northern Ontario Energy Credit 2019 - 2020
- Individuals receive a maximum of $154
- Families receive a maximum of $237
Ontario Property and Energy Tax Credit 2019 - 2020
- You could receive a maximum of $1,065 if you are 18 to 64 years old
- You could receive a maximum of $1,213 if you are 65+
- You could receive a maximum of $237 if you live on a reserve or in public long-term care
- You could receive a maximum of $25 if you lived in a student residence
Ontario Sales Tax Credit 2019 - 2020
- Maximum of $308 for an individual
- Additional maximum of $308 for your spouse or common-law partner and each dependent child under 19 years of age on the first monthly installment
How is the benefit paid?
The OTB is received by taxpayers on the 10th of every month starting in July, and ending in June of the following year. If you receive your income tax refunds by direct deposit, your OTB will be deposited in that same account. Otherwise, you will be mailed a cheque for your credit.
In most cases, the payment will be made as a monthly installment. There are however certain instances in which the payment will be made in one lump sum.
If you are receiving $360 or less, you will receive a lump sum payment on July 10. In addition, you can opt for a single payment of OTB when you file your tax return. In this case, however, the lump sum payment will be paid in June of the following year, at the end of the credit period.
For couples and families, it is important to note that only one person will receive the benefit. While you can choose who will receive the Energy Credits, the Ontario Tax Credit is paid to the person whose tax return is assessed first.
For more information on the Ontario Trillium Benefit or for assistance filing the ON-BEN with your tax return, please contact us today.
