Low Income Ontario Families to Get Additional $300 in Tax Relief Under 2022 Budget

Ford government introduced the 2022 budget yesterday and there is good news for 1.1 million lower-income workers through the proposed Low-income Individuals and Families Tax Credit enhancement.

Ontario says the upper-income limit of the Low-income Individuals and Families Tax (LIFT) credit will be increased to $50,000 per year.

This is especially important as Ontario’s minimum wage will increase to $15.50 in October 2022.

Currently, Ontario Personal Income Tax relief is set at $850 and LIFT credit upper limit is phased out at a rate of 10 per cent for individual income above $30,000 and family income above $60,000.

Under the new budget, the maximum benefit would increase from $850 to $875 and the income thresholds and lower the phase-out rate will be reduced to 5 per cent.

This means that an estimated 1.1 million Ontarians will now get an average tax relief of $300 in 2022.

As per the examples provided in the Budget:

a single worker who earns $40,000 in 2022 and is not eligible under the current LIFT Credit would receive $515 in tax credit under the proposed increase.
a married couple earning, say $35,000 and $30,000 each, is entitled to $765 in tax relief under the current rules. When LIFT Credit enhancement comes into effect, they would see a combined $845 in additional tax relief.

The government says the proposed enhancement would provide an estimated $320 million in additional Personal Income Tax relief per year and the total number of beneficiaries of LIFT will increase to an estimated 1.7 million Ontarians.

The tax credit can be claimed when filing the annual tax returns.

More Information is available here.

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