#GivingTuesday and your charitable tax dollars

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It’s a door crasher that keeps on giving! It’s not a Black Friday sale, or a Cyber Monday bargain, and you don’t even need to line up at 9 p.m. the night before to get this deal. This is one present that is sure to benefit you and others in the long run…

A charitable tax credit!

December 2 is Giving Tuesday, a day dedicated to kicking off the giving season. The month of December is also the last opportunity to get your charitable donations up over $200 — helpful when planning for your taxes in the spring. Alberta has one of the highest charitable tax credits in Canada. For every dollar you donate over $200, you could receive a tax credit of 50%.

So, this holiday season, if you are able consider giving the gift of a donation by making a contribution to help a charitable organization. Not only will you assist an organization in helping someone else, it could mean a tax credit in the spring and that is a much nicer present than that $20 blender you got on Black Friday!

If you donate to a Canada Revenue Agency registered charity, keep your tax receipts to claim your tax credit on your personal income tax return. Here’s how this works:

Charitable Tax Credit

The numbers below show you how your tax credit could work.

Remember, in looking at the numbers, that the 50% tax credit applies to your total annual donations over $200. The first $200 you donate earns you a lower tax credit (10% provincial, 15% federal).

The amount of your charitable tax credit depends on the total value of your personal donations during the year. To optimize your tax credit, donate more!

Making Your Charitable Donations Work Harder

Total Annual Donations*

Alberta

Federal

Total Tax Credit**

$500.00

$83.00

$117.00

$200.00

$1,000.00

$188.00

$262.00

$450.00

$2,000.00

$398.00

$552.00

$950.00

$5,000.00

$1,028.00

$1,422.00

$2,450.00

$10,000.00

$2,078.00

$2,872.00

$4,950.00

$25,000.00

$5,228.00

$7,222.00

$12,450.00

(Applies to Alberta taxpayers only)

* Total Annual Donations – When you make a charitable donation to a Canada Revenue Agency registered charity, you receive an official income tax receipt. You will receive a receipt for each individual donation you make.

** The charitable tax credit is non-refundable, which means you must be a taxpayer to benefit from the tax credit.

Example

Here’s how to calculate your charitable tax credit with total annual donations of $500. Detailed instructions are provided with your income tax return forms.

  1. Gather all your official charitable donation tax receipts and add them up (i.e. $100 to a youth shelter + $50 to a local food bank + $350 to a health organization = $500 in total annual donations).
  2. Provincial tax credit:
    1. On the first $200, the provincial tax credit rate is 10%, yielding a tax credit of $20.
    2. On the amount over $200, you receive a provincial tax credit of 21% (see note below). This would yield a tax credit of $63.
    3. When you add $20 + $63, your total provincial charitable tax credit is $83.
  3. Federal tax credit:
    1. On the first $200, the federal tax credit is 15%, yielding a federal tax credit of $30.
    2. On the amount over $200, you receive a federal tax credit of 29%. This would yield a tax credit of $87.
    3. When you add $30 + $87, your total federal charitable tax credit is $117.
  4. Your total combined provincial and federal tax credit is $200 ($83 + $117).

Effective January 2007, the Alberta tax credit for eligible charitable donations that exceed $200 in a tax year has increased to 21% of the amount donated. When added to the federal tax credit of 29%, Albertans receive a 50% tax credit on those donations – one of the highest charitable tax credits in Canada. The first $200 in eligible charitable donations made in a tax year continues to receive an Alberta tax credit of 10% and a federal tax credit of 15%.

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