You can get a generous credit on your federal and provincial income tax, through the Charitable Donations Tax Credit.
For annual donations under $200, you will receive a tax credit of about 15 cents per dollar donated on your federal income tax. For donations exceeding $200, you receive about 29 cents for every dollar donated.
The provincial tax credit varies depending on the province in which you live. For example, in Ontario, a $1,000.00 donation would provide a federal tax credit of $262.00 and a provincial credit of about $99.00, so you would pay about $361.00 less tax for the year in which the donation was made.
First-time donors (i.e. neither you nor your spouse has claimed a charitable donation tax credit for any year after 2007) are eligible for an additional 25 per cent credit from the federal government. For an Ontario resident making a first-time donation of $1,000.00, the total tax credit would be about $611.00 — more than half the value of the donation.
To estimate your tax credit, see the tax credit calculator on the Canada Revenue Agency website.
For specific and accurate information about your personal tax situation, we encourage you to consult with a qualified financial advisor.
Additional Tips about the Tax Benefits of Donations
- 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.
- Unclaimed charitable donations can be carried forward up to 5 years. But, you have to claim donations you carried forward from a previous year before you claim donations made in the current year.
- Either spouse can claim a charitable donation tax credit, regardless of which spouse’s name is on the charitable donation receipt.