Tax deadline looming for Canadian charitable donations

Canadians have until December 31 to make charitable donations if they want to take advantage of tax credits for 2017.
Canadians have until December 31 to make charitable donations if they want to take advantage of tax credits for 2017. Global News

You may have noticed many charities make a big push in December to top off their donations for the year, appealing to those who may want to give back during the holidays.

“It’s the time of year that, typically with Christmas and New Year’s, people are more charitable in the first place,” explains accountant James Hanna.

Another reason for the timing has to do with need, especially for the clients of organizations that serve the homeless, or other groups affected by the cold winter weather.

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There’s also another, possibly more selfish reason, however.

“If you want to have the tax advantage for your 2017 tax return, you have to have that money donated prior to December 31,” Hanna says.

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Canadians are eligible for a tax credit when they donate to any registered charity in the country, as long as they get a tax receipt.

“The first $200 receives a 15 per cent credit federally, and a 20 per cent credit provincially, so it’s a combined 35 per cent for Quebec,” Hanna says.

Above $200, the tax credit goes to 29 per cent federally and 24 per cent provincially. So for donations of more than $200, the combined the tax credit is 56 per cent of your donation.

Many charities collect a substantial percentage of their annual donations in the month of December.

“We receive a significant amount in the month of December compared to the rest of the year, which is very helpful for the services that we offer,” says Melissa Lutchman with the Old Brewery Mission, which offers emergency shelter for Montreal’s homeless.

According to online fundraising platform CanadaHelps, the holiday season is a “make-or-break time for smaller charities.”

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Charitable donors also have the option to carry the tax credit for their donation forward to a later year, useful for students or others with a lower income.

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There’s also another incentive: the first-time donor’s “super credit.” If you haven’t donated between 2007 and 2013, any donations you’ve made from 2013 to 2017 are eligible for an additional 25 per cent tax credit. Just one catch: you only have two days left, as that credit ends this year.