Dale Jackson

Personal Finance Columnist, Payback Time

Follow|Archive

You don’t need to go far to find Canadians in need this holiday season. Donating to a registered charity is an investment in your community that brings its own reward, but it also brings a dividend in the form of a tax break.  

If you want to claim a charitable tax credit on your 2016 tax return you have until December 31 to make a donation. Unclaimed donations made by you, a spouse, or common law partner this year or the previous five years can also be claimed.

There are two charitable tax credit rates for both the federal government and the provinces and territories. Any eligible amount you give above $200 qualifies you for a higher rate. The rates vary from province to province but here’s an example of how it works on the federal level:

If you donate $300, the federal charitable tax credit rate is 15 per cent on the first $200 (which works out to $30). The tax credit rate on the remaining $100 is 29 per cent, or $29. The total federal tax credit is $59.

Keep in mind this is a non-refundable tax credit and can only be used to reduce tax owed. If you don't owe any tax, you don't get a refund but you can keep it for another year.

If you or your spouse or common law partner have not claimed a charitable donations tax credit for any year after 2007, you can supercharge your contribution by 25 per cent through the first-time donor's super credit supplement.

If you would like to find a charity to give to this holiday, all registered charities are listed on the Canada Revenue Agency website.