Credits, Benefits & Incentives

How does the tax credit work?

The tax credit is intended to:

• stimulate mineral exploration in Ontario, and
• improve access to capital for small mining exploration companies.

What are the benefits?

The tax credit:

• provides eligible individual shareholders a refundable tax credit of five per cent of eligible Ontario expenses
• can be applied to reduce Ontario tax payable, and
• any unused amount of the credit will be refunded to the individual.

Am I eligible for the credit?

To be eligible for the tax credit, an individual must:

• have purchased eligible flow-through shares in accordance with section 66 of the federal Income Tax Act
• be subject to Ontario income tax for the taxation year in which the credit is being claimed
• be an individual, other than a trust, who is a resident in Ontario on December 31 of the taxation year, and
• have eligible Ontario exploration expenditures as defined in the Ontario Income Tax Act.

Who can claim the credit?

• An eligible individual may claim the credit either alone or as a member of a partnership.
• Estates are also eligible to claim the credit on the final return of a deceased taxpayer.

How do I apply for the credit

Ontario tax credits are funded by the province. The Canada Revenue Agency (CRA) administers the program on behalf of Ontario through the personal income tax system.

To apply for the credit, you must:

• complete form ON479 Ontario Credits, included in your Ontario T1 General income tax package for the year in which the credit is claimed
• complete form T1221, Ontario Focussed Flow-Through Share Resources Expenses for 2001 and Subsequent Years (Individuals)
• obtain form T101, Statement of Resource Expenses, or form T5013, Statement of Partnership Income, from the mining exploration company which incurred qualifying expenses in Ontario, and
• submit these forms with your personal T1 General income tax return to the CRA.