Possibilities House For Children Inc. is proud to announce that we have been granted Official Registered Charitable Status from the Government of Canada and the Canadian Revenue Agency, and can now be found on the Canadian Charities Directorate.
In receiving our Official Charitable Status you (any Individual, Corporation, or legal entity in Canada) can donate directly to Possibilities House for Children and you can receive an official tax receipt for your use in income tax processing.
Charitable Donation Example
Emily, a school teacher from Ontario, donates $100 a month to Possibilities House to Sponsor a Child. What tax savings can she expect?
In 2015 in Ontario a $1200 donation could yield a $320.00 Federal Tax Credit and a $121.70 Provincial Tax Credit for a total of $441.70. If Emily was a first time donor she would also have received an extra $250, for a $691.70 tax credit. Wow… Emily gave just about $500 out of pocket to give her sponsor child $1200. Thanks Emily!
Charitable Donation Tax Tips
Donating more has big benefits!
To encourage donations, the federal and provincial governments provide a two-tiered credit system. Add up all your donations. The amount up to $200 qualifies for a tax credit at the lowest tax rate. The amount over $200 qualifies for a credit at the highest tax rate. When the federal and provincial programs are combined, taxpayers reduce their taxes by about 25% of the total donated up to $200. (The exact amount varies by province.) For the amount over $200, the saving is about 45%, which again, varies by province. Alberta provides an extra incentive; although its highest tax rate is only 39%, the charitable credit is a generous 50%.
The CRA has a new handy feature, the Charitable donation tax credit estimator, which will instantly calculate your total tax credit, based on the amount of the donation and your province of residence.
First Time Donors?
For donations made after March 20, 2013, qualifying first time donors may receive an additional federal tax credit of 25% on the first $1,000 of monetary donations, over and above the amounts indicated on this page. For details, go to First-Time Donor’s Super Credit.
Donations made by one spouse / common-law partner can be claimed by either one. To maximize the credit, all donations can be lumped together. It does’t matter by which person, they can use the credit as long as they pay taxes.
Carry them forward!
Some or all of your donations may be carried forward for up to five years. This should be done to take advantage of the higher credit over $200. Also, donations made in years of low income or when other credits are used (so no taxes would be paid anyway) should be carried forward. Finally, any donations over the 75% net income limit should be carried forward.
Many computer tax programs automatically suggest a carry forward when no federal taxes are payable. Check if provincial taxes are still payable; if so, override to include donations to reduce provincial taxes also to zero.
Donating Stocks has benefits
New rules encourage the donation of publicly traded securities (stocks, bonds, etc.) that have appreciated in value. There is now no capital gains tax on such gifts. This could be quite a benefit, as you get the tax credit on the higher amount, but do not have to pay any tax on your gain. Check with your charity about how to make such a gift. For more information, see the CRA’s Gifts and Income Tax, and Gifts of Publicly Traded Shares and Stock Options, as well as Capital Gains.
You can Donating In-kind
A recent survey by Statistics Canada found that almost everyone (94% of those aged 15 and older) makes financial or in-kind charitable donations. In-kind donations are commonly items such as clothing, toys, household goods, or food. Other examples include valuable art or antiques.
CRA does allow a tax credit for gifts of property (but not for gifts of services). In order to get a tax credit for in-kind donations, you must have a receipt from the charity showing the “fair market value” of the gift. In general, don’t expect a receipt for donations of old clothes, furniture, etc; however, you can get a receipt for donating more valuable items.