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 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
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| Family income range over which benefit is reduced increased
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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.
The LIFT credit is included in the Detailed Canadian Tax and RRSP Savings Calculators for 2018 and later years.
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) | 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 = C - 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 07, 2022