Information about charitable contributions and taxes
The Canadian income tax system encourages gifts to charitable organizations by granting tax credits. The actual tax credit may vary slightly depending on the province you live in. In Quebec, if you have already donated more than $200 to any charity this year, another donation now would mean a 53% tax return! Total annual donations of under $200 will give you approximately a 35% return.
It’s important to know that regardless of whose name appears on the donation receipt, either spouse can claim a tax credit. The general limit on the deduction of charitable donations is 75% of net income. However, unclaimed charitable donations can be carried forward for up to five years.
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Bonus Super Credit for first-time donors!
How does the Super Credit work? It can be used once until the 2017 tax year. It provides an extra 25% tax credit on donations up to $1,000 for those who qualify as first-time donors. Note: you can qualify as a first-time donor if you haven’t claimed a charitable donation in the last five years.
$1,000 Donation without the Super Credit
= $506 after Tax cost*
$1,000 Donation with the Super Credit
= $256 after Tax cost*
*Based on Provincial and Federal Tax Rates
Are you eligible as a first-time donor?
- If you and your spouse (or common-law partner) have not claimed a charitable donation during the last five years, you will be considered a first-time donor.
- Donors who last made a claim in the 2010 tax year or before, are eligible to claim a temporary Super Credit for donations made after March 20th, 2013.
If you are a resident of Quebec and are entitled to a refundable federal tax abatement, your actual federal tax credit will be reduced. If you are required to pay a provincial income surtax, your actual saving will be more than the charitable tax credit calculated because the credit will reduce your base income taxes and your provincial surtax.