In the 2013 Economic Action Plan the federal government introduced the first-time donor’s super credit. The credit can be claimed once from the 2013 to 2017 taxation years.
This credit provides an extra 25% credit to first-time donors in addition to the federal and provincial charitable donation tax credits for up to $1,000 of monetary donations.
An individual is considered a first-time donor if neither the individual nor the individual’s spouse or common-law partner has claimed the charitable donations tax credit.
John is an eligible first-time donor who donates $1,000 of money to a qualified charitable organization during 2014. John’s federal charitable donations tax credit and his first-time donor’s super credit will be as follows:
- First $200 of charitable donations claimed: $200 x 15% = $30
- Charitable donations claimed in excess of $200: $800 x 29% = $232
- First-time donor’s super credit: $1,000 x 25% = $250
John’s total federal and first-time donor’s tax credits for the 2013 tax year will be $512.
It is important to note that only Canadian registered charities can issue official donation receipts that qualify for charitable tax credits. Before donating to any charity, you can check whether or not they are registered under the Income Tax Act by searching the CRA’s charity listing online.