When was the last time you, your spouse or common-law partner claimed a charitable donation on your tax return? If it was before 2008, you are now considered a first-time donor under the new enhanced credit for charitable donations, and you can claim the credit on your 2013 tax return.
You normally get a federal credit of 15% on your first $200 of donations and 29% on donations in excess of $200. The new first-time donor credit will boost this by 25% for cash donations of up to $1,000. It works by increasing the credit on donations of less than $200 to 40 per cent and to 54% for donations between $200 and $1,000. A first-time donor who made the maximum donation of $1,000 would therefore receive a total federal credit of $512, which is $250 more than the regular amount:
|
Regular |
First-time donor |
|||||
| Donation |
Less than $200 |
$200 |
Total credit |
Less than $200 |
$200 |
Total credit |
| $1,000 |
$30 |
$232 |
$262 |
$80 |
$432 |
$512 |
The provinces also provide a two-tier tax credit for donations, so your tax savings will be even greater when this is factored in. However, at the time of writing, none of the provinces or territories had announced a parallel credit for first-time donors. Those tax savings are shown below:
|
First-time donor credit: combined federal and provincial |
||||||
|
Province/territory |
Federal |
Federal |
Provincial |
Provincial |
Total |
|
|
Less than |
$200 |
Less than |
$200 |
|||
| Newfoundland |
$80.00 |
$432.00 |
$15.40 |
$106.40 |
$633.80 |
|
| PEI |
$80.00 |
$432.00 |
$19.60 |
$133.60 |
$665.20 |
|
| Nova Scotia |
$80.00 |
$432.00 |
$17.58 |
$168.00 |
$697.58 |
|
| New Brunswick |
$80.00 |
$432.00 |
$18.20 |
$143.60 |
$673.80 |
|
| Ontario |
$80.00 |
$432.00 |
$10.10 |
$89.28 |
$611.38 |
|
| Manitoba |
$80.00 |
$432.00 |
$21.60 |
$139.20 |
$672.80 |
|
| Saskatchewan |
$80.00 |
$432.00 |
$22.00 |
$120.00 |
$654.00 |
|
| Alberta |
$80.00 |
$432.00 |
$20.00 |
$168.00 |
$700.00 |
|
| British Columbia |
$80.00 |
$432.00 |
$10.12 |
$117.60 |
$639.72 |
|
| Yukon |
$80.00 |
$432.00 |
$14.08 |
$102.00 |
$628.16 |
|
| Northwest Territories |
$80.00 |
$432.00 |
$11.08 |
$112.40 |
$635.48 |
|
| Nunavut |
$80.00 |
$432.00 |
$8.00 |
$92.00 |
$612.00 |
|
In order to qualify, the donations must be made in cash, which means donations of securities or other so-called “gifts-in-kind” are not eligible. The donations must also have been made after the new credit was announced on March 20, 2013.
The credit can only be claimed once for the 2013 to 2017 taxation years, after which it will expire. So if you donate less than the maximum $1,000 this year, you will probably want to carry it forward and add it to what you donate in 2014 to 2017 before making the claim on your tax return.
If you are married or living common-law at the end of the year, you can split the first-time donor credit between you. However, your total claim cannot be more than $1,000.