Charitable donations and the tax credit

When you give money or other property to a registered charity or another qualified donee, you can claim a federal non-refundable tax credit for it, and a provincial or territorial one too. The credit is worth more per dollar once your claim for the year passes a small first tier, and you don’t have to claim a donation in the year you make it.

How the credit is worked out

You calculate the federal credit on Schedule 9. For 2025 it’s:

• 14.5% of the first $200 you claim for the year
• 29% of the rest
• 33% instead of 29% on the part of the rest that matches your taxable income above $253,414

Outside Quebec, your province or territory then gives its own credit, worked out on its Form 428 from the same donation amounts, at its own rates. The personal tax credits table compares them.

Because the lower rate applies to the first slice on every return, it can pay to put a couple’s donations on one return, or to save up small donations and claim several years together. Pooling donations and medical expenses explains how.

Give to a qualified donee

Only gifts to qualified donees count. Besides registered charities, qualified donees include registered Canadian amateur athletic associations, registered journalism organizations, registered national arts service organizations, registered municipalities and registered public bodies performing a function of government in Canada, registered low-cost housing corporations for the aged, registered universities outside Canada that ordinarily include students from Canada, registered foreign charities that have received a gift from the Government of Canada, the United Nations and its agencies, and the federal, provincial and territorial governments.

Before you give, look the organization up in the CRA’s List of charities, or in its lists of other qualified donees. Non-profit organizations that aren’t qualified donees can’t issue receipts you can claim. For a donation to count as a gift and qualify for a receipt, the CRA sets conditions: among them, you must make it voluntarily, it can’t be directed to a specific person or to an organization that isn’t a qualified donee, and the organization has to be able to work out its eligible amount.

Get an official receipt

You need an official donation receipt from the qualified donee for every amount you claim. Organizations that can issue receipts don’t have to, so ask. If the organization agrees to give you one, you can expect it by February 28 of the year after you give; some organizations send one receipt for all your cash gifts in the year. If you give property rather than cash, you get a separate receipt for each gift, valued at its fair market value when you gave it.

The receipt usually shows the eligible amount: the fair market value of what you gave, minus the value of anything you got in return (the CRA calls this an advantage). If you pay $300 for a ticket to a charity’s fundraising dinner and the dinner is worth $80, for example, the eligible amount is $220.

If you file online, keep your receipts in case the CRA asks for them. If you file on paper, attach Schedule 9 but not the receipts.

How much you can claim in a year

Generally, you can claim eligible donations up to 75% of your net income for the year. Certain gifts of capital property can be claimed up to 100% of net income in some cases. In the year someone dies, gifts can be claimed up to 100% of their net income, and any excess can go on the return for the year before, again up to 100% of that year’s net income.

Carrying donations forward

You don’t have to claim a donation in the year you make it. You can carry it forward and claim it in any of the next five years, or the next ten for a gift of ecologically sensitive land. That’s useful in a year when you have little tax to reduce, or to bundle small gifts so more of them are above the first tier.

When you do claim, amounts carried forward from earlier years have to be claimed before the current year’s. Each donation can be claimed only once, so keep track of what you’ve claimed and what’s left.

Giving shares instead of cash

If you donate shares listed on a designated stock exchange, or units of a mutual fund trust or shares of a mutual fund corporation, directly to a qualified donee, you may be entitled to an inclusion rate of zero on the capital gain, so none of the gain is taxed, and the eligible amount of the gift is still based on its fair market value. The same can apply to certain other property, such as prescribed debt obligations and certified ecologically sensitive land given to a qualified donee other than a private foundation. If you receive something in return for the gift, only part of the gain gets the zero rate.

Report these gifts on Form T1170, Capital Gains on Gifts of Certain Capital Property, and carry the amounts to Schedule 3. The zero rate applies to the gain realized on the gift of the property itself. For how capital gains are normally taxed, see dividends and capital gains.

If you live in Quebec

You claim the federal credit on your federal return as usual. On your Quebec return, you claim Quebec’s credit on line 395, using Work Chart 395 or Schedule V. For 2025, the Quebec credit is 20% of the first $200 and 24% or 25.75% of the rest. Amounts you don’t use can be carried forward up to five years after the year of the donation.

What to do

• Check that the organization is a registered charity or other qualified donee before you give.
• Ask for an official receipt, and keep every one.
• Decide whether to claim this year or carry the donation forward, and which partner’s return to use.
• If you hold shares that have gone up in value, consider giving the shares directly.
• See what your donations save you in the income tax calculator.