Gift Tax Advantages

Philanthropic giving has its benefits

As a registered charity with the CRA, donations made to the Carleton Place and District Memorial Hospital Foundation qualify for tax credits. Read below to learn more. We encourage our donors to speak to their financial advisors to ensure they are receiving the most up to date information and to make the most out of their gifts.

Income Tax Act s. 118.1(1), 118.1(3) states:

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.

A donation must be received by the charity by December 31 in order to receive a charitable donation receipt for the taxation year.

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.

For more information on a quick calculation of the tax credit on your gift please see the Charitable Donation Tax Credit Calculator from CRA.

Optimizing the Donation Tax Credit

When a taxpayer has a spouse or common law partner and the combined donations are greater than $200, the donations for both spouses should usually be combined and claimed on one tax return. Check your tax return carefully in relation to donations. It is possible that by claiming all donations on one tax return, the donations may not be completely utilized. If this is the case, you can either carry forward some of the donations, or split the donations between spouses.

Donations Carried Forward

Donations need not be claimed in the year they are paid. They can be carried forward for up to 5 years.

First-time Donor's Super Tax Credit (FDSC)

The Federal 2013 Budget introduced a temporary First-time Donor's Super Credit (FDSC), which is available to an individual if neither the individual nor the individual's spouse or common-law partner has claimed the Charitable Donation Tax Credit (CDTC) or the FDSC in any of the 5 preceding taxation years.

The FDSC will provide an additional 25% tax credit for a first-time donor on up to $1,000 of donations. This will provide the first-time donor with a 40% federal tax credit for donations of $200 or less, and a 54% federal credit for donations over $200 but not exceeding $1,000. Only donations of money will qualify for the First-time Donor's Super Credit.

Although donations can be carried forward for up to 5 years, the FDSC will not apply in a subsequent year. The tax credit rate for carried-forward donations when claimed in a subsequent year will be the rates in effect for that year. The FDSC is available for donations made on or after March 21, 2013, and may be claimed only once in the 2013 tax year, or a subsequent tax year before 2018. The FDSC will not be available after 2017.

Tax Advantages

Check out the tax advantages for gifts of $25,000 (using 45 per cent average of top two combined Ontario marginal tax rate):