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Charitable Deductions and Income Tax

 

Charitable Donations and Income Tax 

You may claim your donations on your personal income tax return. However, please remember that you get 15% federal tax credit for the first $200 of donations. If you both made charitable donations of $200 each, it may be more beneficial to you to combine them and claim on one return as you will get 29% federal tax credit on amounts exceeding the first $200.

Note. You will also get Ontario tax credits on top of the above federal tax credits. Also, if you did not claim donations made during the previous years, you can now combine them for the past FIVE years and claim them. Limits: - Generally, you can claim all of such Charitable Donations to a maximum of 75% of your net income. For the year a person dies and the year before that, this limit is 100% of the person’s net income.

POLITICAL DONATIONS FEDERAL – Federal political contribution is claimed in a graduated manner. CRA allows these three rates as follows: On the first $200 - Claim 75% = $150. On the next $350 - Claim 50% = $175 (and a total of $325 on $550). On the balance - Claim 33 1/3% to a maximum tax credit of $500 in one year. Limits: - If total political contributions are $1,075 or over, you may have a maximum tax credit of $500.

ONTARIO – Provincial political contribution is also claimed in a graduated manner as follows: On the first $300 - Claim 75% = $ 225. On the next $700 - Claim 50% = 350 (and a total of $575 on $1,000). On the balance - Claim 33 1/3% to a maximum tax credit of $1,000 in one year. Limits: - If total political contributions are $2,275 or over, you may have a maximum tax credit of $1,000. Note: - CRA will not accept as proof of payment, cancelled cheques, credit card receipts, pledge forms or stubs.

All donation receipts must have Registered Charity Number and show the tax year it relates to. The above is for your information only. For specific reference, please consult Income Tax Act. E&OE