Ontario -> Personal tax credits -> Ontario Non-Refundable LIFT Credit
Ontario Low-income Individual and Families Tax (LIFT) Credit - Non-Refundable
Ontario Taxation Act, 2007 s. 21.1
The LIFT credit will be in effect for low-income workers residing in Ontario, for the 2019 and subsequent taxation years. It will provide a provincial income tax reduction of up to $850 for an individual and $1,700 for a couple.
The maximum tax reduction is the lesser of $850 and the individual's employment income (does not include self-employment income) for the year multiplied by the lowest tax rate (currently 5.05%). Thus, 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. The amount of the credit is reduced by 10% of individual income greater than $30,000, and family incomes greater than $60,000. An individual with only employment income will have zero provincial income tax with employment income up to approximately $29,200, and the LIFT credit would be reduced to zero at employment income of approximately $38,550. Both of these amounts are if the individual has no income other than employment income. The Ontario Health Premium would still be payable on taxable income greater than $20,000.
The new LIFT credit is included in the 2019/2018 Detailed Canadian Tax and RRSP Savings Calculator.
LIFT Credit Calculation Examples - Single Individuals and Married Couple
Single Individual LIFT Credit
Let's consider Jessie (J), Kelsey (K) and Laurie (L), all single individuals
- J has $31,000 of employment income and no other income
or deductions
- K has $29,000 of employment income and $600 other income
- L has $18,000 of employment income and $600 other income
| LIFT Credit examples for 3 different single individuals | ||||
| J | K | L | ||
| Employment income | A | $31,000 | $29,000 | $18,000 |
| Employment income x lowest tax rate of 5.05% | B | $1,565.50 | $1,464.50 | $909.00 |
| Lesser of B and LIFT maximum of $850 | C | 850.00 | 850.00 | 850.00 |
| Adjusted individual net income: | ||||
| - Employment income | A | $31,000.00 | $29,000.00 | $18,000.00 |
| - Less deduction for enhanced CPP contribution 0.15% x (A - $3,500) | (41.25) | (38.25) | (21.75) | |
| - Add other income | 0 | 600.00 | 600.00 | |
| Adjusted income (in this case also taxable income) | D | $30,958.75 | $29,561.75 | $18,578.25 |
| Excess over threshold (D - $30,000) (zero if negative) | E | $958.75 | $0 | $0 |
| Reduction of LIFT credit 10% x E | F | (95.88) | 0 | 0 |
| Maximum LIFT credit = lower of C and (E - F) | G | $754.12 | $850.00 | $850.00 |
| Provincial income tax before LIFT credit | H | $934.92 | $871.01 | $217.68 |
| Less LIFT credit (lesser of G and H) | I | ($754.12) | ($850.00) | ($217.68) |
| Ontario health premium | J | 300.00 | 300.00 | 0 |
| Net provincial income tax payable H - I + J | $480.80 | $321.01 | nil | |
Married Couple LIFT Credit
Let's consider married couple Jessie (J) and Kelsey (K):
- J has $31,000 of employment income and no other income
or deductions
- K has $29,000 of employment income and $3,000 other income.
Note: If K had no employment income, K would receive no LIFT credit.
| LIFT Credit example for married couple | |||
| J | K | ||
| Employment income | A | $31,000 | $29,000 |
| Employment income x lowest tax rate of 5.05% | B | $1,565.50 | $1,464.50 |
| Lesser of B and LIFT maximum of $850 | C | 850.00 | 850.00 |
| Adjusted individual net income: | |||
| - Employment income | A | $31,000.00 | $29,000.00 |
| - Less deduction for enhanced CPP contribution 0.15% x (A - $3,500) | (41.25) | (38.25) | |
| - Add other income | 0 | 3,000.00 | |
| Adjusted individual income (in this case also taxable income) | D | $30,958.75 | $31,961.75 |
| Adjusted family income (sum of J + K adjusted individual incomes) | D2 | $62,920.50 | $62,920.50 |
| Excess over individual threshold (D - $30,000) (zero if negative) | E | $958.75 | $1,961.75 |
| Reduction of LIFT credit 10% x E | F | (95.88) | (196.18) |
| Maximum LIFT credit using individual income = lower of C and (E - F) | G | $754.12 | $653.82 |
| Excess over individual threshold (D2 - $60,000) (zero if negative) | E2 | $2,920.50 | $2,920.50 |
| Reduction of LIFT credit 10% x E2 | F2 | (292.05) | (292.05) |
| Maximum LIFT credit using family income = lower of C and (E2 - F2) | G2 | $557.95 | $557.95 |
| Provincial income tax before LIFT credit | H | $934.92 | $992.21 |
| Less LIFT credit (lesser of G, G2 and H) | I | ($557.95) | ($557.95) |
| Ontario health premium | J | 300.00 | 300.00 |
| Net provincial income tax payable H - I + J | $676.97 | $734.26 | |
Other Resources:
Low-income Individuals and Families Tax (LIFT) Credit - on Ontario website
Revised: May 12, 2019