Ontario Research Employee Stock Option Credit


Notice to the reader: The Ontario Research Employee Stock Option Credit was available for taxation years up to and including 2009. The tax credit is not available after December 31, 2009.

Frequently Asked Questions about Purpose and Administration

What is the ORESO credit?

The ORESO credit is a tax credit claimed by employees against their taxable income to reduce their Ontario personal income tax. It is associated with the exercise or disposition of stock options granted by research and development (R&D) companies, and from capital gains associated with the sale of shares acquired through exercising eligible stock options. The stock option benefit or the capital gains must have been reported in income in respect of 2009 or earlier years.

The maximum amount of credit is $100,000 per year. There is no lifetime limit to the amount of taxable stock option benefits and taxable capital gains that qualify for a refund. The stock options must have been granted after December 21, 2000 and before May 18, 2004.

Why is Ontario giving a credit to research employees?

The credit provides Ontario businesses with an incentive to attract and retain skilled research employees.

Who administers the credit?

The Ontario Ministry of Finance administers the program. Employers are required to provide the Ministry of Finance with information relating to their eligibility and their eligible employees.

How do eligible individuals obtain the credit?

Eligible employees must submit applications for refunds to the Ministry of Finance. Applications should not be sent to the Canada Revenue Agency. The application must be accompanied by a copy of each of the following documents:

  • a Certificate of Eligibility from the employer
  • a Notice of Benefit from the employer
  • their federal Notice of Assessment and any subsequent Notices of Reassessment, and
  • a completed Form ON428 Ontario Tax, filed with their income tax return (T1).
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