It is not unusual for countries, states or provinces to owe money. These debts are accrued over the years and are gradually paid off through internally generated revenue or other means. The Province of Ontario is no exception, and one of the avenues it has devised to pay off its debt is through the Ontario Opportunities Fund.
The Ontario Opportunities Fund is a way taxpayers in Ontario are involved in reducing the provincial debt. If you are a taxpayer in Ontario, here are the things you need to know about the Ontario Opportunities Fund.
What Is the Ontario Opportunities Fund?
The Ontario Opportunities Fund is an initiative of the Province of Ontario that was introduced in 1996 to reduce its increasing debt. It is a fund taxpayer in Ontario contribute to as a way of reducing the provincial debt.
The provincial government encourages residents to contribute as it allows them to reduce the province’s debts owed directly. The government issues a receipt to any residents who contribute to the fund.
You can use this receipt to claim a non-refundable tax credit. Note that you can only claim this receipt once during a tax year. Generally, contributions to the Ontario Opportunities Funds are made in tax refunds, though you can also send money directly.
There are currently two significant ways to contribute to the Ontario Opportunities Fund; they include:
- Income Tax refunds
If you are entitled to an income tax refund, you can choose to donate all or part of your refund to the Ontario Opportunities Fund. Usually, once the Canada Revenue Agency (CRA) has thoroughly reviewed your taxes, tax refunds are sent to your bank account or by any other means you have chosen.
You can choose to donate your tax refunds to the Ontario Opportunities Fund. To do this, all you need to do is complete the Ontario Opportunities Fund area on page 4 of your tax return.
You can contribute any amount from $2 and above. Note that any amount less than $2 is not acceptable. Choosing to donate through your tax refund means that you can only contribute once a year.
- Check Or Money Order
This method allows you can contribute to the Ontario Opportunities Fund more than once a year and anytime. You can donate by writing a check or a money order and mail it to the Ontario Financing Authority’s address. Below is the address you should send it to:
Ontario Financing Authority,
1, Dundas Street, West suite 1400,
Ensure that the check or money order is payable to the Minister of Finance- Ontario Opportunities Fund. Once this is done, the government will file all the donations you’ve made towards the Ontario Opportunities Fund.
A receipt with all the contributions you’ve made is usually sent out in February of each year. The ticket will show donations made for the previous tax year and their respective dates.
You don’t need to send these receipts to the Canada Revenue Agency (CRA) when filing your annual tax turn to claim the Ontario Opportunities Fund tax credits. It is advisable to keep copies of all your receipts for referencing, except you no longer need them for tax purposes.
How To Claim A Credit
The government will send you a receipt showing all your contributions to the fund and the tax year they were made; this receipt is usually issued in February.
When claimed in the form of a tax credit, this receipt can help you reduce the tax you are required to pay. It can also result in a refund, though you can only claim it once.
Once you get the official receipt, you should use the dollar amount indicated to calculate your total non-refundable tax credit on the tax refund.
You can either claim the tax credit on the same year you made the contributions to reduce the total tax you owe, or you can carry it forward and claim it on your tax return for any of the succeeding five years. Also, you can claim tax credits for contributions made in the last five years.
To claim a credit, use the instruction for Schedule 1, Line 34900 and ON428 Form line 5896 to calculate the federal and provincial contributions and gifts tax credit for the tax year. You can use Line 34900 to claim the whole eligible amount.
The limit you can claim is 75% of your net income. It is advisable to claim tax credits for contributions carried forward from previous years before claiming tax credits for the current year’s assistance.
Ontario Tax form: Form ON428 line 58969 is also termed Donations and Gifts on the form. You can calculate the amount entered on line 58969 by taking entries from lines 16 and 17 for 2019, 17 and 18 for 2020 of the federal Schedule 9. Proceed to multiply these amounts using the rates on lines 32 and 33 for 2019, 44 and 45 for 2020 on Ontario Tax form ON428.
Calculating and claiming non-refundable tax credits can be daunting, especially if it is your first time. Suppose you made contributions to the Ontario Opportunities Fund, and you intend to claim tax credits on your annual return, there are several ways you can go about it. Using tax software is one of the ways to simplify claiming your tax credits.
The Ontario Opportunities Fund is a way for you as a taxpayer in Ontario to help the government pay off provincial debts. As a way of showing gratitude, the government sends you a receipt for your contribution, which you can claim as a tax credit, and can use to reduce the amount of tax you owe. It can also result in a tax refund. So, it is a win-win situation for both the government and the taxpayers in Ontario.