Take advantage of the ‘first-time donor’s super credit’

The federal government introduced a new “first-time donor’s super credit” last year, but many Canadians are still either unaware of what it is or not quite sure of what the details are.

The headline news is that it gives eligible donors an extra 25 per cent non-refundable federal tax credit when they claim their charitable donation tax credit.

More specifically this means you can get a 40 per cent credit for up to $200 in cash donations and a 54 per cent credit for the part of the cash donations that is over $200 but not more than $1,000. This is in addition to the provincial credit.

So who qualifies? You qualify as a first-time donor if neither you nor your spouse or common-law partner has claimed the charitable donation tax credit since 2007.

Keep in mind that only donations made to registered charities and qualified donees are eligible. To check if an organization is registered, go to the Canada Revenue Agency Charity Listings: www.cra.gc.ca/charitylists .The Charity Listings also provide information about registered charities’ activities, revenues, and expenditures.

How much can you claim? The maximum is $1,000 in donations.

It’s important to note, though, that this is a “one-off” opportunity: you can only claim the first-time donor’s super credit once.

How far back can you reach for unused past donations for the first-time donor’s super credit? For the regular donor tax credit, donations can be carried forward up to five years. However, for the first-time donor’s super credit, the credit will apply only to cash donations made after March 20, 2013, and, as noted, up to a maximum of $1,000 in donations. It’s important to remember, too, that this is a “one-off,” temporary credit: you can only claim it once from the 2013 to 2017 taxation years.

To find out what your estimated credit will be, use the charitable donation tax credit calculator on the CRA website.

For more information on the first-time donor’s super credit, go to www.cra.gc.ca/fdsc.


The TaxLetter, MPL Communications Inc.
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