Government Gives Back with First-Time Donor’s Super Tax Credit | FBC, Canada's Farm & Small Business Tax Specialist

Government Gives Back with First-Time Donor’s Super Tax Credit

Government Gives Back with First-Time Donor’s Super Tax Credit

donationThe government is encouraging taxpayers to be charitable and is being charitable in return with the First-Time Donor’s Super Tax Credit.

Perhaps the downturn in the economy the past few years caused you to hold back on donations to charitable organizations.

Perhaps reduced income or job loss restricted your generosity as you looked to take care of your family in hard times.

With the economy recovering, perhaps you’re in a better position now to give back. Now is the time to consider charitable gifts and take advantage of the government’s generosity to increase your tax credits.

The 2013 budget introduced the First-Time Donor’s Super Credit as a temporary supplement to the existing non-refundable tax credit for charitable donations by individuals.

The Donor's Super Credit is available if neither you nor your spouse or common-law partner has claimed the Charitable Donation Tax Credit or the First-Time Donor’s Credit in any of the 5 preceding taxation years. 

This super tax credit can be claimed once from the 2013 to 2017 taxation years.

The First-Time Donor’s Super Credit will provide an additional 25% tax credit for a first-time donor on up to $1,000 of donations.

This will provide the first-time donor with a 40% federal tax credit for donations of $200 or less, and a 54% federal credit for donations over $200 but not exceeding $1,000. 

The First-Time Donor’s Super Credit will be available for donations made on or after March 21, 2013, and may be claimed only once in the 2013 tax year, or a subsequent tax year before 2018. 

Example of Increased Tax Credit from First-Time Donor’s Super Credit

An eligible first-time donor claims $500 of charitable donations in 2013. All of the donations are donations of money.

The first-time donor’s First-Time Donor’s Super Credit and Charitable Donation Tax Credit would be calculated as follows:

First $200 of charitable donations claimed:

$200 x 15% =

$30

Charitable donations claimed in excess of $200:

$300 x 29% =

$87

First-Time Donor’s Super Credit:

$500 x 25% =

$125

Total Tax Credit

$242

 

Without the First-Time Donor’s Super Credit the tax credit would have been only $117.

Note that the First-Time Donor's Super Credit is only available for personal donations.

Some donations don't qualify for the Charitable Donation Tax Credit and it may be better to make a donation through your corporation.

 

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