Income 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 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.
2009 Donations Tax
Credit Rates
| |
First
$200 |
Amount
over
$200 |
Tax Credit
for donation
of $1,000 |
Combined
Fed/Prov
Tax Credit
for donation
of $1,000 |
| Federal |
15.00% |
29.00% |
$262.00 |
|
| AB |
10.00% |
21.00% |
188.00 |
$450.00 |
| BC |
5.06% |
14.70% |
127.72 |
389.72 |
| MB (1) |
10.80% |
17.40% |
160.80 |
422.80 |
| NB (2) |
9.65% |
17.00% |
155.30 |
417.30 |
| NL |
7.70% |
15.50% |
139.40 |
401.40 |
| NS |
8.79% |
17.50% |
157.58 |
419.58 |
| NT |
5.90% |
14.05% |
124.20 |
386.20 |
| NU |
4.00% |
11.50% |
100.00 |
362.00 |
| ON |
6.05% |
11.16% |
101.38 |
363.38 |
| PE |
9.80% |
16.70% |
153.20 |
415.20 |
| QC |
20.00% |
24.00% |
232.00 |
494.00 |
| SK |
11.00% |
15.00% |
142.00 |
404.00 |
| YT |
7.04% |
12.76% |
116.16 |
378.16 |
(1) MB
rate for first $200 is reduced to 10.7% for 2010.
(2) NB rates
are reduced to 9.3% and 14.3% for 2010.
See also
