What Are Donation Tax Credits?
There are 86,000 CRA-registered charities across Canada where taxpayers can contribute based on what’s important to them. Donation tax credits are government incentives encouraging individuals and businesses to increase their charitable donations that benefit our communities. These tax incentives have varying rates based on federal and provincial policies. Some of the programs our government supports are social programs, healthcare, and education, where individuals and corporations can claim their donation as long as the charitable organization is registered with the CRA.
Notable Tax Donation Changes for 2025
- Canada’s Minister of Finance amended the Income Tax Act by extending the deadline for claiming donations in the 2025 tax year until February 28, 2025. This extension mitigates delays caused by the Canada Post strike, which disrupted cash donations for donors contributing to a registered CRA charity.
Claiming Charitable Donation Tax Credit
For every charitable contribution you make, it’s important to collect a donation receipt. Without the donation receipt, donors will not be able to claim a tax credit. One tax tip is that donation receipts can be carried forward over 5 years, so a donation in 2024 can be claimed in 2027 as long as you have the receipt.
In Canada, there are two distinct categories for charitable donations:
Cash Gifts
The simplest method for donation contribution is cash gifts, which are donations transacted through cheques, money orders, bank drafts, and cash.
Gift in kind
While cash donations are the most common, a gift in kind refers to a non-cash asset, such as private property or stocks, but excludes services as gifts. These donations are more complex as they require fair market value appraisals, where the donor may be subject to paying a capital gains tax for non-cash donations.
However, certain in-kind donations are exempt from capital gains tax due to the significance of the donation, with the benefit of claiming the tax credit.
These special Gift in Kind donations include:
- Certain types of publicly traded securities, such as stocks, bonds, and mutual funds.
- If your gift is considered an ecologically sensitive land that has been certified for preservation of Canada’s environmental heritage
- Donating significant cultural property to a Canadian institution or public authorities that includes sculptures, books, and ethnographic objects
WANT TO TAKE ADVANTAGE OF CRA DONATION TAX CREDITS?
Get expert guidance to lower your taxable income with tax donations.
The Different Provincial Tax Donation Rates in Canada
Tax credits for charitable donations vary across Canada, as each province sets its rates in addition to the federal tax credit. Below is a table outlining the different rates for charitable donations in Canada:
| Province/Territory | First $200 Donation (%) | Amount Above $200 (%) |
| Federal | 15.00% | 29.00% |
| Alberta | 60.00% | 21.00% |
| British Columbia | 5.06% | 16.80% |
| Manitoba | 10.80% | 17.40% |
| New Brunswick | 9.40% | 17.95% |
| Newfoundland & Labrador | 8.70% | 21.80% |
| Northwest Territories | 5.90% | 14.05% |
| Nova Scotia | 8.79% | 21.00% |
| Nunavut | 4.0% | 11.5.0% |
| Ontario | 5.05% | 11.16% |
| Prince Edward Island | 9.80% | 16.70% |
| Quebec | 20.00% | 24.00% |
| Saskatchewan | 10.50% | 14.50% |
| Yukon | 6.40% | 12.80% |
| Example: Let’s say Frank lives in British Columbia and he wants to claim a BC donation tax credit. Frank decided to donate $1,000 to a charity in 2024, his combined federal and provincial tax credit is 20.06% on the first $200, which equals about $41.20. For the remaining $800 of the donation, he gets a combined tax credit of 45.80%, equaling about $366.40. Frank’s combined total tax credit is $407.60 (41.20+366.40), and his $1000 donation costs $592.40. |
Claiming Tax Donations as an Individual
Individuals who donate to registered charities can claim their donations on their income tax return (T1). To do this, they must obtain official donation receipts from a CRA-registered charity which is claimed by completing Schedule 9. The amount claimed on the Schedule 9 form will be carried to line 34900 of your T1.
To help maximize your tax savings, taxpayers can combine donations with a spouse or common-law. It is possible to claim all donations on one tax return, but it may not be fully utilized. Taxpayers can defer claiming their tax donations up to 5 years or split the donations between spouses to reduce their taxable income.
Claiming Tax Donations as a Corporation
While corporations in Canada can benefit from charitable donations, these donations are considered tax deductions instead of tax credits. Corporations can claim a maximum of 75% of their net income, which can carry forward unused deductions up to 5 years. Proper record-keeping and obtaining official receipts from charities are necessary for businesses to claim these deductions on corporate tax returns in order to help lower their corporate tax rate and to take advantage of tax-free dividends (Capital Dividend Account).
How Advanced Tax Can Help with Your Donation Tax Credit
Donation tax credits offer Canadians a meaningful way to support causes they care about while reducing their tax burden. With varying federal and provincial rates, and options like cash gifts, gifts in kind, and corporate donations, understanding the rules can help maximize your return. For the best results, consult a tax professional to ensure you’re getting the full benefit. the work-from-home tax credit.