Charitable donation tax credit:

What qualifies as a charitable gift?

Charitable gifts include:

  • Canadian registered charities
  • Registered Canadian amateur athletic associations
  • Prescribed universities outside of Canada
  • Certain tax –free housing organization in Canada
  • Canadian municipalities
  • The United Nations or its agencies
  • Charities outside of Canada to which the Government of Canada has made a donation in the year or preceding year
  • Crown gifts
  • Cultural gifts
  • Ecological gifts

 

How to compute?

(AxB) + C(D-B)

A = 15% (Current federal tax credit rate for the year)

B = First 200 dollars of the total gift

C = 29% (Highest federal tax bracket for the year)

D = Individuals total gift

 

Limitations and carry forwards

This credit is only limit to 75% of the taxpayer’s net income. If the eligible donation in one year exceeds the taxpayer’s 75% of net income, then the excess amount is carried forward to the next 5 years. The carried forward amount is then claimed first before any additional amounts can be claimed.

 

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