What is the Ontario Opportunities Fund?

The Ontario Opportunities Fund was introduced back in 1996 to help reduce the ballooning debt the province of Ontario owed. Since then, taxpayers have contributed more than $3 million to help their province get out of debt. Unfortunately, the province still owes about $300 billion, which explains why the local government encourages residents to contribute. In the next sections, we examine everything you should know about the Ontario Opportunities Fund, including how to donate and how to claim resulting tax credits.

What is the Ontario Opportunities fund?

The Ontario Opportunities Fund is a fund Ontario taxpayers can contribute to in order to reduce their provincial debt. Those who choose to contribute to the Ontario Opportunities fund will receive a receipt from the government. You can claim these receipts in the form of non-refundable tax credits. More about how to claim the tax credits is described below. Ideally, contributions to the Ontario Opportunities Fund are made in the form of tax refunds, but you can also send money directly.

How Do You Contribute?

Are you ready to make your first donation to the Ontario Opportunities Fund? There are two primary ways taxpayers can make their contributions. These include:

a) Income Tax Refund

If you are entitled to an income tax refund, you can choose to donate any of that amount to the fund. Once the CRA (Canada Revenue Agency) completes reviewing your taxes, tax refunds will be sent to your bank account or other chosen method.

If you are eligible to receive a tax refund, you can choose to redirect your refund to the Ontario Opportunities Fund. The CRA allows you to redirect all or a portion of your tax refunds, which can be done when filing your annual return. The Ontario Opportunities Fund area appears on page four of your return. You can contribute any amount, although donations below $2 will not be processed. You can only claim the donation once during a tax year.

b) Check and Money Order

If you want to contribute to the Ontario Opportunities Fund multiple times in a year, the check and money order options are the only other options available. You can donate at any time of the year by writing a check or money order and mail it to the Ontario Financing Authority. Make sure the check is payable to the Minister of Finance – Ontario Opportunities Fund. Here's the address for sending your check or money order contributions:

Ontario Financing Authority

1 Dundas Street West, Suite 1400

Toronto, Ontario

M7A 1Y7

The government will record all donations you make towards the Ontario Opportunities Fund and send a receipt with all the contributions. This is usually done in February of each year, showing donations made for the previous tax year and their respective dates. You don't need to send these receipts to the CRA when filing your annual return and claiming Ontario Opportunities Fund tax credits. However, you should always keep copies of all your receipts unless you no longer need them for tax purposes.

How to Claim Your Opportunities Fund tax credit

When Ontarians contribute towards reducing your provincial debt, the government reciprocates their gesture by offering them an opportunity to reduce the tax they are required to pay. This comes in the form of a tax credit, which offsets your total tax contributions. To claim your tax credit, you need the official receipt of the donations. Once you have the receipt, you can use the dollar amount indicated therein to calculate the total non-refundable tax credit on your T1.

You can claim the tax credit on the same year the contributions were made to help offset your total tax owed. Alternatively, you can carry the tax credit forward to offset future tax requirements. The CRA allows you to claim the tax credit on your tax return for any of the next five years. Although the tax credits are aimed to reduce the total tax you are required to pay, they may also result in a refund, but you can only claim it once. Use the instructions for Schedule 1, Line 34900 and ON428 Form line 5896 to calculate the federal and provincial donations and gifts tax credit for the tax year.

Line 34900 of your Income Tax and Benefit Return (formerly Schedule 1), also known as Donations and Gifts, was line 349 for tax years before 2019. This line allows you to claim the entire eligible amount up to the limit of 75% of your net income. You must first claim tax credits for contributions carried forward from previous years before claiming tax credits for the current year's contribution. 

Form ON428 (Ontario Tax) line 58969 (for 2019 and onward) is also titled Donations and Gifts on the form. To calculate the amount entered on line 58969, take entries from line 16 and line 17 for 2019 (17 and 18 for 2020) of the federal Schedule 9 and 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. If you made contributions to the Ontario Opportunities Fund and wish to claim tax credits on your annual return, there are various ways to achieve this, including using a tax software like SimpleTax to make the task easier. You can claim tax credits for contributions made in the last five tax years. It is vital to keep all the contribution receipts you get from the government in case CRA requests to review them.