Frequently Asked Questions About Refunds
- How does the federal legislation allowing deferrals affect an employer's reporting requirements?
- How does the federal legislation allowing employees to defer the taxable benefit arising from exercising stock options affect the ORESO credit?
- What if I owe other amounts to the Province of Ontario?
- What happens if my income tax return is adjusted or re-assessed after I receive my ORESO credit?
- When can I expect to receive my refund?
- How will my refund be calculated?
How does the federal legislation allowing deferrals affect an employer's reporting requirements?
For each calendar year, an eligible employer must provide to the Ministry of Revenue, for each eligible employee, the amount of the taxable benefit and the amount of the benefit that has been deferred by the employee.
How does the federal legislation allowing employees to defer the taxable benefit arising from exercising stock options affect the ORESO credit?
Federal legislation requires that the taxable benefit arising from the exercise of stock options to acquire publicly-listed shares be included in income in the year the options are exercised or defer the inclusion of the taxable benefit to the year in which you dispose of the shares.
If you elect to defer a taxable benefit arising from the exercise of stock options eligible for the ORESO credit, do not include the benefit in income until the shares acquired under the stock option are sold. You will be able to apply for the ORESO credit for the tax year in which you sell the shares and include the benefit in income.
What if I owe other amounts to the Province of Ontario?
The amount of a taxpayer's refund and interest will be applied to reduce any other outstanding amounts that are owed to the province of Ontario instead of paying the refund. The taxpayer's Notice of Entitlement will explain how the refund was applied.
What happens if my income tax return is adjusted or re-assessed after I receive my ORESO credit?
You must advise the Ontario Ministry of Revenue of any changes made to your income tax return by CRA which would affect the calculation of your ORESO refund. The Ministry will recalculate your adjusted Ontario income tax using the additional information and an additional refund or request for repayment will be sent to you.
When can I expect to receive my refund?
The Ontario Ministry of Revenue will process the applications once all required documents are received, and issue refund cheques as soon as possible to taxpayers eligible for the refund.
The Ministry will provide a Notice of Entitlement to all taxpayers who submit an application. The Notice of Entitlement will indicate:
- the amount of the refund, if any
- how the Ministry determined the amount of the refund, and
- information on the taxpayer's right to object to the Notice of Entitlement.
How will my refund be calculated?
You must pay the amount of Ontario income tax as filed on your income tax return with CRA, without taking into account the ORESO credit. You then apply to the Ontario Ministry of Revenue for the ORESO credit after you receive your Notice of Assessment from CRA. On the application form, you are allowed to deduct the credit, up to $100,000, from your taxable income. Your Ontario income tax is then recalculated to determine the amount of adjusted Ontario income tax.
The adjusted Ontario income tax is subtracted from the amount of Ontario income tax you actually paid, and the difference is refunded by the Ministry of Revenue. The recalculation of Ontario tax payable does not affect your Ontario tax credits and other deductions as calculated on your income tax return.
For the 2005 and subsequent taxation years, compound daily interest on a tax refund will be paid starting on the day that is the later of:
- 30 days after the individual's income tax balance due day for the taxation year (usually April 30) and
- the date of the individual's income tax Notice of Assessment for the taxation year.
For taxation years up to and including 2004, compound daily interest on a tax refund will be paid starting on the day that is the later of:
- 45 days after the individual's income tax balance due day for the taxation year (usually April 30) and
- the date of the individual's income tax Notice of Assessment for the taxation year.
