Use your donations to save at tax time - Segment 3
Welcome to segment 3 called "Use your donations to save at tax time", part of the "How to donate wisely - Information for donors" recorded webinar.
How to use your donations to save at tax time
Registered charities do not have to issue official donation receipts. Therefore, if you require a donation receipt, the CRA recommends that you ask the charity if an official donation receipt will be given prior to making your donation.
You cannot claim an income tax credit unless you have an official donation receipt.
If you lose your official donation receipt, you can ask the charity to issue a replacement. You should receive a replacement receipt which contains all the required information plus a note to the effect that the receipt cancels and replaces the original receipt bearing serial number (the serial number of the lost receipt is inserted here).
Only donations made on or before December 31st of the tax year of your return are eligible.
Individual tax returns
Claim your eligible donations on Schedule 9 of your income tax and benefit return.
You should keep your official donation receipts from registered charities and other qualified donees for five years in case we ask to see them.
If you are claiming a carry forward, attach a note to your return indicating the year of the return with which you submitted the official donation receipt, the portion of the eligible amount you are claiming this year, and the amount you are carrying forward.
Regardless of how you file, you should also keep supporting documents (for example, cancelled cheques, pledge forms) and proof of payment (credit card slips, stubs, bank statements) in case the CRA selects your claim for review.
Federal and provincial tax credits
Tax credits are calculated as a percentage of the amount you donate in a given year. For example, in 2013, the first $200 you donate is eligible for a federal tax credit of 15% of the donation amount. After the first $200, the federal tax credit increases to 29% of the amount over $200. Generally, you can claim all or part of your donations up to a limit of 75% of your net income.
You may also be eligible for a provincial tax credit for your donations. The amount of the provincial tax credit varies between provinces.
You can estimate the amount of tax credit available for eligible donations claimed on an income tax and benefit return for a tax year, by province of residence, by using our online Charitable donation tax credit calculator.
Charitable donation tax credit calculator
The donation tax credit calculator is available on the left-hand panel of the main menu on the Charities and giving website. This slide provides an example of the online calculator.
Simply select your province of residence and enter your donation amount, then press calculate. The federal, provincial, or territorial tax credits and total donation tax credits will be displayed.
Maximize your donation tax credit
Here are a few tips to maximize your donation tax credits:
Since an official donation receipt can be claimed for a 5-year period, combine your donations from previous years on a single year's tax return. Another option is to combine your donations with those of your spouse or common-law partner and report them on a single return.
First-time donor's super credit
The first-time donor's super credit applies to individual first-time donors only. An individual is considered a first-time donor if neither the individual nor the individual's spouse or common-law partner has claimed the charitable donation tax credit in any of the five preceding tax years.
- It adds 25% to the federal charitable donation tax credits.
- For monetary donations made after March 20, 2013, to December 31, 2017.
- For a maximum claim of $1,000.
Spouse and common-law partner
As a first-time donor, you can share the first-time donor's super credit, along with the corresponding charitable donations tax credit, with your spouse or common-law partner in a particular tax year. However, the total amount of donations that both individuals can claim for the first-time donor's super credit cannot be greater than $1,000. When you and your partner cannot agree on the amount of the credit that each of you will claim, the CRA may divide the credit between you.
Charitable donation tax credit calculator
To calculate the additional credit earned with the first-time donor's credit, select the donation tax credit calculator. Scroll down the page to the section called "additional federal tax credit calculator for first-time donors" and enter the monetary donations eligible for the credit in the section below the regular calculation. (So remember, only the donations made after March 20, 2013, and donations made before January 1, 2018 are eligible.)
Then press "calculate." The addition credit and new total donation tax credit will be displayed.
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