You can claim a federal and provincial non-refundable tax credit on your taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition return when you or your spouse or common-law partner gives money or other property to a registered charity or other qualifying organization.
Only registered charities can issue official receipts for income taxIncome tax A charge you pay based on your total income from all sources. The Canadian government and your province set the rate.+ read full definition purposes. Check the CRA Charities Listings to find out if a charity is registered.
How the tax credit works
In most cases, the amount you can claim is the amount shown on your charitable donation receipt. The maximum donation amount you can claim is 75% of your net income.
Up to and including 2015, you get:
- a 15% federal tax creditTax credit The amount you can deduct from your income when you file your taxes. This lowers the tax that you owe.+ read full definition for the first $200 of charitable donations,
- a 29% federal tax credit for amounts over $200, and
- a provincial tax credit.
With the introduction in 2016 of the new high tax bracketTax bracket The rate at which you pay tax, based on your income level.+ read full definition of 33% on taxable incomeTaxable income The amount of income you have to pay tax on, after tax credits and deductions.+ read full definition over $200,000, a third donation tax credit rate of 33% will be implemented. It will apply to charitable gifts over $200 to the extent that you have income taxed at the new 33% rate. If you don’t have income that falls into the 33% tax bracket, the tax credit that will apply to your donations over $200 will be 29%.
For example, if you have $215,000 of taxable income and you make a charitable donation of $20,000 in 2016, your federal donation tax credit would be $6,372 ($30 + $4,950 + $1,392), calculated as follows:
- $30 ($200 x 15%)
- $4,950 [($215,000 – $200,000) x 33%]
- $1,392 [($20,000 – $200 – $15,000) x 29%]
You don’t have to claim all the donations you made this year on your current year’s return. You can carry them forward and claim them on your return for any of the next 5 years. However, the changes described above are only for donations made after 2015. Those made before 2016 but carried forward and claimed in 2016 or future years won’t be eligible for the new 33% rate.
You can combine your receipts with your spouse and have only one person claim the entire charitable donations amount in order to maximize the amount subject to the higher tax credit rate.
If you file a paper return, submit your receipts. If you file electronically, keep your receipts as support for your claim. Learn more about charitable donations.
The maximum donation amount you can claim is 75% of your net income.
Rules introduced in 2011
The 2011 BudgetBudget A monthly or yearly estimated plan for spending and saving. You work it out based on your income and expenses.+ read full definition included changes to charitable donation rules, including:
- Rules that aim to stop people from acquiring and donating flow-through shares at little or no after-taxAfter-tax The money you have left after you pay taxes on money that you made working or investing.+ read full definition cost.
- Extending rules that apply to registered charities to other entities that are also allowed to issue official donation receipts:
- registered Canadian amateur athletic associations
- Canadian municipalities
- public bodies performing government functions in Canada
- housing corporations constituted exclusively to provide low-cost housing for the aged
- non-Canadian universities (which ordinarily have Canadian students)
- other non-Canadian charitable organizations.
First-time donor’s super credit (FDSC)
The 2013 Budget introduced a temporary “super credit” for donations made after March 20, 2013 for taxpayers:
- who have either never claimed the charitable donation tax credit, or
- who have not done so since 2007.
If your spouse claimed the donation tax credit after 2007, you will not be considered a first-time donor. Also, you can only claim the FDSC once from the 2013 to 2017 tax years.
The donation super credit is a 25% enhancement to the existing federal tax credit: 25% on donations of money up to $1,000, made after March 20, 2013.
Learn more about the first-time donor’s super credit.
Only registered charities can issue official receipts for income tax purposes. Check the CRA Charities Listings to find out if a charity is registered.