Tax Benefits of Giving
The Canadian income tax system encourages gifts to charities by granting tax credits to individual donors (corporations may claim deductions). For annual donations under $200, you will receive a tax credit of about 22 cents per dollar donated. For donations exceeding $200, you receive even more – about 43 cents for every dollar donated.
These are federal and provincial tax credits. The provincial tax credit varies depending on the province in which you live. We encourage you to consult with a qualified financial advisor for the most accurate information regarding your personal taxation situation.
To estimate your tax credit, see the tax credit calculator on this Web site.
For more detailed information regarding charitable giving, see the Canada Customs and Revenue Agency Web site.
Additional tax tips:
- Charitable donations may be claimed up to an annual limit of 75% of net income (100% for gifts made in the year of death, including testamentary gifts such as bequests).
- Individuals and corporations who donate shares or other securities get a tax break on any resulting capital gain. As of the May 2, 2006 Federal Budget, any capital gains arising on the donation of the securities will be tax-free.
- The securities must be publicly traded on certain stock exchanges; for example, the TSE, the NYSE, or certain other listed exchanges.
- Unclaimed charitable donations can also be carried forward up to 5 years.
- Either spouse can claim the tax credit, regardless of which spouse's name is on the charitable donation receipt.
First-Time Donor’s Super Credit
Starting in the 2013 taxation year, the Federal Government proposes to introduce a temporary non-refundable FDSC that will supplement the Charitable Donations Tax Credit (CDTC) for individuals. This new credit effectively adds 25% to the rates used in the calculation of the CDTC for up to $1,000 of monetary donations. As a result, a first-time donor will be allowed a 40% federal credit for donations of $200 or less, and a 54% federal credit for the portion of donations over $200 but not exceeding $1,000.
- For the 2013 taxation year, an individual will be considered a first-time donor if neither the individual nor the individual’s spouse or common-law partner has claimed the CDTC in any of the five preceding tax years.
- Only donations of money that are made after March 20, 2013 will qualify for the FDSC. For taxation years from 2013 to 2017, a new line will be added to Schedule 9, Donations and Gifts, to identify the eligible portion of the charitable donations that you have claimed that are donations of money.
Please visit: http://www.cra-arc.gc.ca/gncy/bdgt/2013/qa01-eng.html for more information.
Click here to Calculate your First-Time Donor's Super Credit.