Did you receive a CRA OTB Notice email and have no idea what it means? This article will help you understand what the OTB Notice means and why you might have received it.
In Canada, we are fortunate to have universal healthcare, unemployment insurance, and child benefits. Raising a family or even living independently is an expensive task and usually doesn’t come along with very many tax breaks; however, there are some you may not know about. If you are a low-income family or individual living in Ontario, you might be eligible to apply for OTB.
What is an OTB Notice from the CRA?
The Ontario Trillium Benefit (OTB) is a refundable tax credit that helps low-income families in Ontario pay for energy costs, sales tax, and property tax. It is one payment that combines three tax credits: the Northern Ontario Energy Credit, the Ontario Energy and Property Tax Credit (OEPTC), and the Ontario Sales Tax Credit.
You may receive an OTB notice through mail or email if there are changes to your current situation that may affect your eligibility. Typically, these are due to a change in marital status or a move.
An OTB notice will usually require you to log into your CRA account and update your information or give the CRA a call for them to do it manually. Occasionally these OTB notices outline how they have overpaid you and will require some of the tax credit back.
So don’t be surprised if you get an OTB notice that says you’re owing money. If you review your CRA account, there should be a general explanation in the original notice as to what the amount owed is for.
What is the Northern Ontario Energy Credit, and who is eligible for it?
The Northern Ontario Energy Credit is a tax-free payment that assists Northern Ontarians who face higher home energy costs. To qualify, you must live in one of the following places: Algoma, Cochrane, Kenora, Manitoulin, Nipissing, Parry Sound, Rainy River, Sudbury, Thunder Bay, or Timiskaming (Ontario).
There are a few other requirements on top of where you live to be eligible. You have to either be a parent who currently lives with or has lived with their child, a person who currently lives with or has lived with a spouse or common-law partner, or are over 18 years old.
In addition to meeting at least one of those criteria, the applicant must have paid money towards living expenses in the last year.
A few examples of different people that would all be eligible for the credit are: an 18-year-old renter living with their spouse in a Thunder Bay apartment, a 36-year-old who lives on the Timiskaming reserve but pays for home energy costs, a 42-year-old parent and homeowner in Cochrane who pays property taxes, or an 86-year-old living in a senior’s home in Kenora who pays for a portion of their accommodation.
Many people are eligible for the Northern Ontario Energy Credit, and eligibility depends on where you live on the 1st of each month. An individual could be eligible for up to $158, while families could receive a maximum of $243 (Ontario).
What is the Ontario Energy and Property Tax Credit (OEPTC), and who is eligible for it?
The OEPTC is a tax-free payment that assists with your property taxes and sales tax on energy costs. To qualify, you must meet the same criteria as the Northern Ontario Energy Credit; however, you don’t have to live in Northern Ontario specifically.
So you must either be a parent who currently lives with or has lived with their child, a person who currently lives with or has lived with a spouse or common-law partner, or are over 18 years old, in conjunction with having paid money towards living expenses in Ontario in the past year.
Those 18-64 years could be eligible for up to $1,095, while 65+ could receive up to $1,247 and those living on reserves or in a public long-term care home are eligible for up to $243 (Ontario).
What is the Ontario Sales Tax Credit, and who is eligible for it?
The Ontario Sales Tax Credit is a tax-free payment that assists Ontarians with the sales tax they pay.
To qualify, you have to live in Ontario and either be a parent who currently lives with or has lived with their child, a person who currently lives with or has lived with a spouse or common-law partner, or are over 19 years old.
An individual could be eligible for up to $316, while an additional credit of up to $316 may be received for your spouse or common-law partner and each dependent child under 19 years old.
How do you apply for OTB?
To apply for OTB you must file your personal income tax return with a completed ON-BEN Application Form and the CRA will determine your eligibility and credit entitlement amount. If you have direct deposit set up with the CRA the credit will be added directly into your account upon approval.