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.