Dale Jackson

Personal Finance Columnist, Payback Time

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The holidays are a time for giving, and there’s no shortage of those in need this year.

If you find yourself in a position to give before Dec. 31, any donation to a registered charity can help lower your 2018 tax bill by applying a credit. There are two charitable tax credit rates for both the federal government and the provinces and territories. In each case, any eligible amount you give above $200 qualifies you for a higher rate.

Rates across provinces and territories vary but the federal charitable tax credit rate is 15 per cent on the first $200 and 29 per cent on anything over. A $300 donation, for example, can generate a federal tax credit of $59.

Tax credits on charitable donations made in any year can also be applied to future years. 

In any one year, you may claim:

• Donations made by Dec. 31 of the applicable tax year
• Any unclaimed donations made in the previous five years
• Any unclaimed donations made by your spouse or common law partner in the year or in the previous five years

It’s important to know charitable donations are considered non-refundable tax credits. That means they can only be used to reduce tax owed. If you don't owe any tax, you don't get a refund.

It’s also important to know that the holidays are ripe for charity scams either in person, over the phone or on the Internet. Emails and collection boxes may even be marked with the logos of genuine charities.

All registered charities in Canada are overseen by the Canada Revenue Agency and listed in its database.