What You Need to Know About Charitable Donation Tax Credits When Filing Taxes

It’s officially the time of the year that everyone dreads—tax season. In Canada, you must file your taxes by April 30th (or June 15th if you or your spouse are self-employed), so the deadline is coming up soon. While filing taxes has become easier in recent years—especially with the option to file online—there are still some aspects of the tax process that can be a bit complicated. In this article, we’ll cover the important information you need to know about charitable donations tax credits when filing your taxes.

What Is the Charitable Donation Tax Credit?

In Canada, tax credits can be claimed by individuals who have donated to a charity or qualified nonprofit organization—often referred to as a charitable donation tax credit or just simply a donation tax credit. When these tax credits are claimed, they can reduce the amount of tax you owe to the government. So, by making charitable donations, you are both helping to make the world a better place by supporting important work and also receiving tax benefits yourself.

When filing your income tax and benefit return, you can choose to claim part or all of the eligible charitable tax credit amount—up to 75% of your net income. Your tax credit rates will depend on which territory or province you live in and will affect the tax credit amount you are eligible for. Here is more information that can help you determine potential charitable tax credits and how to calculate them.

You can also use this charitable donation tax credit calculator to calculate your charitable donation tax credit. But, this calculator does not take into account all tax situations, so it may not be completely accurate in terms of the tax credit you are eligible to claim. However, it can still be helpful by giving you an idea of what claiming a tax credit would look like.

Another important thing to know about charitable donation tax credits is a policy referred to as “Carry Forward.” Essentially, this policy allows you to carry forward the tax credits available to you to another tax year.

For example, if you made a certain number of donations to charities in 2021, you could claim a charitable donation tax credit when filing your taxes for that year, or you could carry those charitable contributions forward and claim a tax credit for them on a future tax return. Carrying gifts forward can actually be more beneficial and lead to you receiving a higher credit.

The time limit to claim tax credits for donations is within 5 years of when the donation is made. One thing to be aware of with carrying forward is that you must claim the tax credits for gifts you carried forward first before you claim tax credits for donations made during the current year.

The Canadian National Christian Foundation provides philanthropic advice and wants to connect God’s money with God’s work. Our staff, our leadership, our board, and our donors are all believers who want to help you manage your assets and guide you through creative giving solutions that also benefit you. We can handle non-cash gifts quickly and effectively, getting the money into the field as soon as possible with 100% of your principal always available to grant out. You can get started by contributing to a donor-advised fund today!

About Canadian National Christian Foundation

CNCF is a community of givers who are seeking to advance the Kingdom of God by connecting the resources God has entrusted to them with His work on earth.

Similar to other public foundations, CNCF’s difference is the commitment of its staff and directors to the Word of God, its non-denominational history and status as a Christian foundation, and its ability to allow donors to donate anonymously, at a time and gift value of their choosing.  Learn more by visiting our website.