Lesson 10

Understand the tax benefits for individual donors

Tax Benefits of a Charitable Gift

The Canadian income tax system encourages individuals to make gifts to charitable organizations by granting tax credits.

The system is generally designed to grant a tax credit at the top marginal tax rate; for annual donations in excess of $200, you will receive a tax credit of approximately 43 cents for every dollar donated. A reduced credit of approximately 22 cents per dollar donated applies to annual donations under $200.

Additional Benefits

Revenue Canada allows you to carry forward charitable donations for up to five years. You may claim any portion of your donations for the year or transfer them to your spouse to claim.

TIP: Canada Revenue and Customs has up to date information and brochures available on their website. See www.cra-arc.gc.ca/tax/charities/menu-e.html

The Canadian Association of Gift Planners also has information about tax credits for certain gifts. See http://www.cagp-acpdp.org/en/default.aspx

To find out what the tax benefits are for individuals in your own province check your local United Way website.

Download word Doc 3: Tax Benefits of a Charitable Gift

Examples of Tax Credits for Manitoba Residents:

In Manitoba, donors receive a Federal Tax Credit of 17% and a Provincial Tax Credit of 10.9% on the first $200 of their charitable donations. Donations above this amount receive a Federal Tax Credit of 29% and a Provincial Tax Credit of 17.8%. We encourage you to consult with a qualified financial advisor for the most accurate information with respect to your particular taxation situation.

Amount of Gift Tax Credit Net cost of gift

$104

$28

$76

$ 365

$130

$ 235

$ 550

$116

$334

$ 730

$300

$430

$ 1200

$518

$682

$ 2400

$1075

$1325