Follow your heart and save money on income tax by contributing to charity this holiday season. Understanding how much tax you will save is an important part of your decision making process.
Charitable work is key to making our local communities, country and world a better place. That’s why the Canadian governments offer significant tax credits to encourage all Canadians to give generously.
To encourage donations, the federal and provincial governments have provided a two-tiered credit system to add up all your donations made over the calendar year.
The amount up to $200 qualifies for a tax credit at the lowest tax rate, 25% of the total donations.
The amount over $200 qualifies for a credit at the highest tax rate, 45% of total donations.
In general, you can get a credit for all donations to registered charities, up to 75% of your net income.
Contributions can be made to many worthwhile causes and non-profit organizations, but only donations to registered charities qualify for an income tax credit.