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Ontario LIFT Credit
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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
was $30,000 to $38,500
will be $32,500 to $50,000
Family income range over which benefit is reduced increased
was $60,000 to $68,500
will be $65,000 to $85,000
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 $30,498 ($29,200 for 2021 and earlier years).
The LIFT credit is reduced to zero at
employment income
of approximately $50,350 ($38,550 for 2021 and earlier years.
Both of the above amounts are if the individual has
no income other than employment income.
The Ontario Health Premium is still payable on taxable
income greater than $20,000.
2021 LIFT Credit Calculation Examples - Single Individuals and
Married Couple
Single Individual LIFT Credit for 2021
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 = C - 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 for 2021
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 = C - F
G
$754.12
$653.82
Excess over individual threshold (D2 - $60,000) (zero if negative)
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