Home -> Ontario -> Personal tax credits -> Ontario Non-Refundable LIFT Credit
Ontario Low-income Individual and Families Tax (LIFT) Credit - Non-Refundable
also known as Low-Income Workers Tax Credit
Ontario Taxation Act, 2007 s. 21.1
The LIFT credit is in effect for low-income workers residing in Ontario, for the 2019 and subsequent taxation years.
The Ontario 2022 Budget provides an Enhancement to the LIFT Credit effective January 1, 2022: | Maximum individual benefit increased from $850 to $875 | ||||
| Maximum benefit for couples increased from $1,700 to $1,750 | ||||
| Phase-out rate reduced from 10% to 5% | ||||
| Individual income range for benefit reduction increased
| ||||
| Family income range over which benefit is reduced increased
|
The LIFT credit is based on the individual's employment income - self-employment income is not used for this credit.
There is no LIFT credit if there is no employment income, nor is there a LIFT credit if there is no provincial income tax otherwise payable.
An individual with only employment income will have zero provincial income tax with employment income up to approximately $30,490 in 2022. However, the Ontario Health Premium is payable on taxable income greater than $20,000.
The LIFT credit is reduced to zero at employment income of approximately $50,350 in 2022.
Both of the above amounts are if the individual has no income other than employment income.
2022 LIFT Credit Calculation Examples - Single Individuals and Married Couple
The LIFT credit is included in the Detailed Canadian Tax and RRSP Savings Calculators. The examples below are for very simple income cases - use the calculator to see your LIFT credit calculation.
Single Individual LIFT Credit for 2022
Let's consider Jessie (J), Kelsey (K) and Laurie (L), all single individuals
- J has $36,000 of employment income and no other income
or deductions
- K has $31,000 of employment income and no other income or
deductions
- L has $23,000 of employment income and no other income or
deductions
| LIFT Credit examples for 3 different single individuals | ||||
| J | K | L | ||
| Employment income | A | $36,000 | $31,000 | $23,000 |
| Employment income x lowest tax rate of 5.05% | B | $1,818.00 | $1,565.50 | $1,161.50 |
| Lesser of B and LIFT maximum of $875 | C | 875.00 | 875.00 | 875.00 |
| Adjusted individual net income: | ||||
| - Employment income | A | $36,000 | $31,000 | $23,000 |
| - Less deduction for enhanced CPP contribution 0.75% x (A - $3,500) | (243.75) | (206.25) | (146.25) | |
| Adjusted income (in this case also taxable income) | D | $35,756.25 | $30,793.75 | $22,853.75 |
| Excess over threshold (D - $32,500 (zero if negative) | E | $3,256.25 | $0 | $0 |
| Reduction of LIFT credit 5% x E | F | 162.81 | 0 | 0 |
| Maximum LIFT credit = C - F | G | $712.19 | $875.00 | $875.00 |
| Provincial income tax before LIFT credit | H | $1,133.10 | $898.98 | $524.39 |
| Less LIFT credit (lesser of G and H) | I | ($712.19) | ($875.00) | ($524.39) |
| Ontario health premium | J | 300.00 | 300.00 | 171.23 |
| Net provincial income tax payable H - I + J | $720.91 | $323.98 | $171.23 | |
Married Couple LIFT Credit for 2022
Let's consider married couple Jessie (J) and Kelsey (K):
- J has $38,000 of employment income and no other income
or deductions
- K has $29,000 of employment income and no other income or
deductions.
Note: If K had no employment income, K would receive no LIFT credit.
| LIFT Credit example for married couple | |||
| J | K | ||
| Employment income | A | $38,000 | $29,000 |
| Employment income x lowest tax rate of 5.05% | B | $1,919.00 | $1,464.50 |
| Lesser of B and LIFT maximum of $875 | C | $875.00 | $875.00 |
| Adjusted individual net income: | |||
| - Employment income | A | $38,000.00 | $29,000.00 |
| - Less deduction for enhanced CPP contribution 0.75% x (A - $3,500) | (258.75) | (191.25) | |
| Adjusted individual income (in this case also taxable income) | D | $37,741.25 | $28,808.75 |
| Adjusted family income (sum of J + K adjusted individual incomes) | D2 | $66,550.00 | $66,550.00 |
| Excess over individual threshold (D - $32,500) (zero if negative) | E | $5,241.25 | $0 |
| Reduction of LIFT credit 5% x E | F | (262.06) | 0 |
| Maximum LIFT credit using individual income = C + F | G | $612.94 | $875.00 |
| Excess over family threshold (D2 - $65,000) (zero if negative) | E2 | $1,550.00 | $1,550.00 |
| Reduction of LIFT credit 5% x E2 | F2 | (77.50) | (77.50) |
| Maximum LIFT credit using family income = C + F2 | G2 | $797.50 | $797.50 |
| Provincial income tax before LIFT credit | H | $1,226.75 | $805.34 |
| Less LIFT credit (lesser of G, G2 and H) | I | ($612.94) | ($797.50) |
| Ontario health premium | J | 404.48 | 300.00 |
| Net provincial income tax payable H - I + J | $1,018.29 | $307.84 | |
Other Resources:
Low-income Workers Tax Credit (known as Low-Income Individuals and Families Tax (LIFT) Credit) - on Ontario website
Revised: September 20, 2024