“If you’re among the almost 75% of Canadians that hasn’t been giving anything to charity or at least haven’t in some time, you can take advantage of the new First-Time Donor’s Super Credit (FDSC). Under the general rules, individuals can claim a non-refundable tax credit of 15% for the first $200 of annual charitable donations. That tax credit rate jumps to 29% for any donations above $200.”
Reblogged from Jamie Golombek
There might be more than a few of us hanging our heads as we skulk past the Salvation Army kettles, hands in our pockets and eyes averted, after a survey this week pointed out that we are donating not only fewer dollars but also a declining percentage of our income to charity than in prior years.
According to the Fraser Institute’s annual “Generosity Index” released earlier this week, a lower percentage of tax filers donated to charity in Canada (22.9%) than in the United States (26.0%). Similarly, Canadians (at 0.64%) gave a lower percentage of their aggregate income to charity than did Americans (at 1.33%).
So, if your lack of giving during this holiday season is causing you some guilty pangs, there are actually a couple of ways to make giving a bit less unsettling by using the tax rules to decrease your after-tax cost of donating.
But to encourage “new” donors to give to charity, the 2013 federal budget introduced the temporary FDSC which provides an additional 25% non-refundable tax credit for a “first-time donor” on up to $1,000 of donations. A first-time donor is someone who hasn’t claimed a donation credit after 2007. If you’re married or living common law, neither you nor your spouse qualify if either of you has made a donation after 2007. While first-time donor couples can share the FDSC in a particular year, the total amount claimed can’t exceed the maximum allowable credit.
As a result, a first-time donor will be entitled to a 40% federal credit for donations of $200 or less and a 54% credit for donations over $200 up to $1,000. Only cash donations will qualify for the FDSC as opposed to donations of property or donations “in-kind.”
The FDSC is available for donations made on or after March 21, 2013 and the credit can only be claimed once in either 2013 or any year until 2017.