With the holiday season upon us, many of us are in the giving spirit! The holidays are a wonderful time to share with those who are less fortunate or to support organizations and charities that we feel do inspiring or important work.
When choosing where to make your donations, you can get the most “bang for your donation buck” by choosing a charity that qualifies for the charitable donation tax credit. Essentially, you receive an income tax credit for the amount of your donation and save yourself some tax. Your $100 donation doesn’t end up costing you $100 when you account for the tax savings!
Remember though, not all charities are created equal! In order to qualify for the charitable donation tax credit, the donation must meet certain criteria and be made to a qualified donee.
CRA’s list of qualified donees includes:
- registered charities
- registered Canadian amateur athletic associations;
- registered national arts service organizations;
- registered housing corporations resident in Canada set up only to provide low-cost housing for the aged;
- registered municipalities in Canada;
- registered municipal or public bodies performing a function of government in Canada;
- the United Nations and its agencies;
- registered universities outside Canada that are prescribed to be universities the student body of which ordinarily includes students from Canada;
- Her Majesty in Right of Canada, a province, or a territory; and
- before June 23, 2015, registered foreign charitable organizations to which Her Majesty in Right of Canada has made a gift. For gifts made on or after June 23, 2015, registered foreign charities (which now include foreign charitable foundations) to which Her Majesty in Right of Canada has made a gift.
Always be sure to get a receipt when you make a donation because you cannot claim the tax credit without one!
Still not sure if the organization you want to donate to qualifies? CRA publishes a list of qualified charities and other organizations that are also qualified donees that you can search. Click on the blue links to check them out!
Time is running out for the 2016 income tax year! Make your donations on or before December 31st to claim them on your 2016 return!
Happy Holidays from our family to yours and best wishes for 2017!