How to deduct charitable gifts on your tax return

Are you looking to deduct your charitable gifts on your tax return? In this post, we’ll talk you through how charitable tax receipts work, and how you can apply them to your returns to reduce your tax spend.

But first, what does a tax receipt do?

The Role of the Tax Receipt

Any time you donate to a registered Canadian charity, you will receive a receipt for your donation. This receipt allows you to prove to the Canadian Revenue Agency (CRA) that you made a donation, and therefore you will be able to deduct a portion of that donation’s value from your taxes.

How Tax Receipts are Issued

You may receive a tax receipt in either electronic or paper form. Charities are free to issue a receipt at any time—whether immediately after receiving a donation, or at the end of the year. The CRA advises charities to send out their tax receipts no later than February 28th for the previous year.

Tax Receipts from Charitable Impact

When you use Charitable Impact for your charitable giving, you will receive your tax receipt the moment you make a donation into your Account.

Your tax receipts will list CHIMP: Charitable Impact Foundation (Canada) as the recipient of your donations. You’ll also see the registration number: 845528827RR0001. This is because we operate as a donor-advised fund. If you have questions about accessing your tax receipt from Charitable Impact, check out these FAQ’s.

What can’t be tax receipted?

Generally, you can only receive a tax receipt for a voluntary transfer of value. You can’t receive a tax receipt for volunteering your time, or loaning an organization part of your property. You also won’t receive a receipt if you pay a charitable organization for goods or services—for instance, a ticket to a fundraiser dinner.

How long are receipts valid for?

You can file unclaimed tax receipts for any, or all, of the previous five financial years. Every financial year ends on December 31. Keep copies of all tax receipts in your files for at least six years, in case the CRA needs to verify that you made a donation.

How tax credits work

Portion of your income tax

You can only deduct up to 75% of your income tax. In some cases, if your donations included “certified cultural property or ecologically sensitive land,” you may be able to write off up to 100%.

Provincial and federal rates

You can apply your charitable gift tax credits twice: once to your federal income tax, and once to your provincial income tax.

The two rates are different, but both, like your income tax, are bracketed. While the federal deduction rate is the same for all Canadians, the provincial one differs according to your province or territory.

To find out more about how much you can deduct from your tax return, take a look at the CRA’s resources on charities and giving.

The paperwork

To report your charitable gifts on your tax return, you must file Schedule 9. The total amount of your donations is also entered on Schedule 1, line 349.

You do not need to submit your tax receipts along with your filing. However, the CRA recommends you keep them on hand for six years after filing, so you can back up your claims in case of an audit.

If you have a question around tax receipts from Charitable Impact, then our team is ready to help! Get in touch by giving us a call at 1-877-531-0580, or emailing us at [email protected].