Claiming charitable tax credits - Questions and answers
Answers to common questions about claiming charitable tax credits.
- Is a charity required to issue an official donation receipt?
- To whom must an official donation receipt be addressed?
- What if I receive something in return for making a donation?
- How can I replace a lost official donation receipt?
- If the charitable status of a charity to which I have recently made a donation has been revoked, can I still claim my tax credit?
- Do I have to claim donations the same year that I make them?
- What information must the official donation receipt include?
- Can a corporation claim a charitable donation deduction?
1. Is a charity required to issue an official donation receipt?
No. However, the Canada Revenue Agency advises charities to notify potential donors of any circumstances in which they will not issue an official donation receipt. Donors cannot claim a charitable tax credit or deduction unless they have an official donation receipt.
2. To whom must an official donation receipt be addressed?
Generally, the official donation receipt can only be issued to the true donor of the gift to a charity. If a donation is made by a cheque in both spousal names, an official donation receipt can be issued in either name. If a corporation sends a donation to a charity, the official donation receipt can be made to the corporation owner only if he has sent a personal cheque. If the corporation is donating money that has been collected from its employees, and there is a written declaration to prove this, the charity can issue the official donation receipt in each donor's name.
3. What if I get something in return for my donation?
When a registered charity provides you with something of value in return for making a donation, this is considered a benefit, which is called an advantage. The advantage generally reduces the eligible amount of your donation for income tax purposes and will be indicated on your official donation receipt.
You donate $1,000 to the Anytown Ballet Company, which is a registered charity. In gratitude, the company provides you with three ballet tickets worth $50 each, for a total value of $150. These tickets are considered an advantage of $150. The eligible amount of your donation for calculating your tax credit is therefore $850 ($1,000 - $150).
For more information, see What is the eligible amount of my gift?
4. How can I replace a lost official donation receipt?
If you lose your official donation receipt, you can ask the charity to issue a replacement. You should receive a replacement receipt which contains all the required information plus a note to the effect that it "cancels and replaces receipt No. (the serial number of the lost receipt is inserted here)."
5. If the charitable status of a charity to which I have recently made a donation has been revoked, can I still claim my tax credit?
If the organization was registered during the time of your donation, and if your receipts genuinely reflect the amount you gave, you can still claim your tax credit. Please note that when a charity is revoked, the organization may donate its assets to another eligible donee; otherwise, the assets are collected as tax.
6. Do I have to claim donations the same year that I make them?
No. You can carry forward any donations you do not claim in the current year and claim them on your return for any of the next five years, but you can only claim donations once. You have to claim tax credits for gifts you carried forward from a previous year before you claim tax credits for gifts in the current year. If you are claiming a carryforward, attach a note to your return indicating the year of the return in which you submitted the official donation receipt, the portion of the eligible amount you are claiming this year, and the amount you are carrying forward.
- a statement that the receipt is an "official receipt for income tax purposes";
- your name and address;
- the charity's Business Number (BN)/Registration Number;
- the amount of the cash donation or the fair market value of the non-cash donation;
- the date of the donation (the year is sufficient for donations of cash);
- the Canada Revenue Agency's (CRA) name and Web site address (www.cra.gc.ca/charities); and
- a unique serial number.
Depending on the kind of donation you make or whether you receive an advantage for making the donation, your official donation receipt may require additional information.
The amount(s) recorded on an official donation receipt, particularly with respect to non-cash gifts, may be subject to review and verification by the CRA. If you donate cash and you are offered a receipt for more than you donated, Contact the Charities Directorate to report it. The amount on an official donation receipt cannot exceed the amount of cash or the value of the items.
For more information, see Guide T4012, T2 Corporation - Income Tax Guide.
You can also call the Business Windows help line at 1-800-959-5525.
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