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Filing Your ReturnDonations Tax Credit / RatesIncome Tax Act s. 118.1(1), 118.1(3)Up to 75% of a taxpayer's net income can be claimed as donations, except in the year of death or the year preceding death, when 100% of net income can be claimed as donations. The donations limit can also be increased when capital property is donated - see the article regarding donations of capital property. Only donations (gifts) to registered charities and other qualified donees (see the Canada Revenue Agency (CRA) definition for a qualified donee) can be claimed as charitable donations. CRA has a web page, Charities and Giving, where you can search charities listings to see if a particular charity is a registered charity. If any "advantage" was received (compensation or other benefits) in return for the donation (e.g., tickets, meals), the eligible gift for purposes of the donation claim is reduced by the value of the advantage received. The tax credit for donations and gifts is in the form of a non-refundable tax credit. The tax credit for the first $200 of donations is at the lowest personal tax rate (except for Québec, which uses 20%), and the tax credit for the amount over $200 is at the highest tax rate federally, and for all provinces and territories except Alberta. Alberta has only one tax rate (10%) for calculating income taxes, but uses 21% as the rate for donations above $200. When a taxpayer has a spouse or common law partner and the combined donations are greater than $200, the donations for both spouses should be combined and claimed on one tax return. Donations need not be claimed in the year they are paid. They can be carried forward for up to 5 years. Under the CRA's administrative policy, and as detailed in the CRA Technical Interpretation 2010-0377811E5, it is permissible for a charitable donation that was initially reported on one spouse or common-law partner's return to be transferred to the other spouse or common-law partner in a subsequent year. 2011 Donation Tax Credit Rates2010 Donation Tax Credit Rates
See also
Tax Tip: claim all donations on the tax return of one spouse.
Revised: December 12, 2011
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