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Charitable donation credit

What this is

Tax credit for charitable donations

Donations to registered Canadian charities generate a federal + provincial tax credit. First $200/yr is at the lowest bracket; everything above is at a high bracket (~46% combined typical).

  • ·Federal: 15% on first $200, 29% on the rest, 33% on portion of donation that puts you in the top federal bracket.
  • ·Provincial: ~5-10% on first $200, ~12-18% on the rest. Adds up to ~46% combined.
  • ·Donating securities IN-KIND (rather than selling + donating cash) avoids the capital-gains tax on those shares — double benefit.

Federal credit

$1,422

Provincial credit

$546

Total credit

$1,968

Net cost of donation

$3,032

Effective credit rate: 39.4%.

Educational. Not financial advice. Donations can be carried forward 5 years if you can\'t use the full credit in one tax year. Donate appreciated securities directly through a brokerage to capture the cap-gains exemption.