HST and the Ontario Sales Tax Transition Benefit

To help ease the transition into the new harmonized sales tax (HST) system coming into effect on July 1, 2010, the Ontario Government has funded the Ontario Sales Tax Transition Benefit (OSTTB) program.  This program will help residents of Ontario adjust to the new HST by providing temporary relief in the form of three tax-free installments in June 2010, December 2010, and June 2011.

The maximum benefit amount is $300 for a single person and $1000 for families, including single parents. The benefits to single people will be reduced if their net income is greater than $80,000 and the benefits to families will be reduced if the family net income is over $160,000. The reduction will amount to 5% of the excess above these thresholds and will be applied to each separate installment. For example, a family with a net income of $163,000 would receive three installments of $180, $185, and $185 as opposed to the maximum installments of $330, $335, and $335, respectively.

Eligibility for each of the three OSTTB installments will be determined independently. For each payment, the Canada Revenue Agency (CRA) will look at your information as of the last day of the month prior to payment. For example, for the December 2010 payment, the CRA will look at your information as of November 30, 2010. On these specified dates you must be a resident of Ontario who is either 18 years of age, married or living common law, or living with someone under the age of 18 who is dependent on you for support. If your marital status changes then you should complete the form RC65, Marital Status Change, or inform the CRA of you new status and date of change in a letter.

However, to qualify you must have filed a 2009 income tax return for the 2010 payments and a 2010 income tax return for the 2011 payment. If you file your retruns late then you will receive payment within 8 weeks after receiving your Notice of Assessment from the CRA. You will receive no 2010 payments if your 2009 tax return is not filed by April 30, 2011 and you will not receive the 2011 payment if your 2010 tax return is no filed by April 30, 2012.

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