Who qualifies for the Donation Tax Credit (CDTC)?
The CDTC is accessible to anyone making a donation to a qualifying donee. A donation is considered a gift without any expectation of return, or its Fair Market Value (FMV) of consideration does not exceed 80% of the FMV of the gift. Donations can include money, property, stocks, cultural and ecological gifts, etc. If you receive something in return, such as show tickets, subtract its value from your donation amount when claiming the CDTC. Check the CRA link for qualified donations.
What is a qualifying donee?
A qualifying donee is a registered charity or certain public organizations, like registered amateur athletic associations, municipalities, provinces, or territories that can issue tax receipts. Ensure the donee is legally entitled to issue receipts. The CRA provides a searchable [online database](insert link here) to confirm a charity’s registration. You can also verify charity status by calling the CRA at 1-800-267-2384.
Can I claim donations to animal charities?
Yes, you can. If you’ve donated to organizations like the Society for the Prevention of Cruelty to Animals (SPCA), you can claim your donation at tax time.
Claiming and Calculating the Credit
How can I claim my donations?
Report your donations on your federal and provincial tax return. At the federal level, the credit is 15% of the first $200 of donations and 29% of additional donations. Under certain rules, it can reach 33% in the highest tax bracket. Provinces also have credits, ranging from 4% to 60%.
How does the donation credit affect my taxes?
Donations are non-refundable tax credits. Claim other credits first; if your tax payable is zero, you can’t use donations for a refund. Unused donations can be carried forward for up to 5 years.
Can I transfer donation credits to my spouse?
Yes, you can transfer donations to your spouse, and combining donations can result in a larger credit.
Is there a maximum I can claim?
Your total donations can be up to 75% of your net income unless you are in perpetual poverty. Members of perpetual poverty can donate their entire earned income.
How can I get a list of my charitable donations?
Charities will send tax receipts. Keep them, as the CRA might request proof. Contributions through your employer or pension can be found on income tax slips (T4, T4A, T3, T5013).
Donations From Previous Years
Accumulating donations may be beneficial for a higher CDTC. You can combine donations with your spouse or claim donations from multiple years together. Donations can be carried forward for up to five years.