2014 Canadian Tax Filing Calendar. Important Deadlines Coming Up In 2015.

I receive a lot of queries surrounding the key Canadian Tax Filing Dates and Deadlines which impacts Individuals and Businesses, so I gathered that information and while not exhaustive, it highlights key dates and deadlines for you to remember and mark on your calendar for the next couple of months.

Remember being late results in penalties and interest and penalties incurred year over year increase in percentage.  For example, a regular non-filer who became a late filer was paying a late filing penalty of 62% by his 5th year of late filing.CRA Logo

2015 Canadian Tax Dates and Deadlines for the 2014 Taxation Year.

For Individuals:

On or before April 30th, 2015 (a Thursday) is the Personal Income Tax return deadline.

Self-Employed (you or spouse/common-law partner):

If you or your spouse or common-law partner carried on a business in 2014 (other than a business whose expenditures are primarily in connection with a tax shelter), the deadline to file your 2014 income tax and benefit return is midnight on June 15th, 2015.

*** However, if you have a balance owing for 2014, you still have to pay it on or before April 30, 2015.

Deceased:

If you are the legal representative – executor, administrator, or liquidator – of the estate of an individual who died in 2014, you may have to file a return for 2014 for that individual.

Information relating to those filing requirements can be found on the CRA website; Guide T4011, Preparing Returns for Deceased Persons,

Additional information can be found here: Information Sheet RC4111, What to do following a death.

The due date for the final return will depend on the date of death and whether or not the deceased or his or her spouse or common-law partner carried on a business in 2014.

Of note, if  you received income in 2014 for a person who died in 2013 or earlier, do not file an individual return for 2014 for that income on behalf of that person.  You likely will have to file a T3 Trust Income Tax and Information Return for the estate.

RRSP Contributions:

March 2nd, 2015 is the deadline for contributing to an RRSP and to have that contribution count towards your 2014 tax year.

If you suspect you might owe taxes, making a RRSP contribution should help lessen the burden, and in some cases will turn your liability into a credit.

Employee / Nanny Filing Deadline for providing a T4:

In all instances, you have to file your T4 information return (T4’s plus T4 Summary) on or before the last day of February following the calendar year that the information return applies to.

If the due date falls on a Saturday, a Sunday, or a public holiday, your return is due the next business day, so for 2015, they are due March 2nd, 2015 as February 28th falls on a Saturday.

The CRA considers your return to be filed on time if they receive it or it is postmarked on or before the due date.  If you fail to file it on time, the CRA will likely assess a penalty.

If you have more than one payroll program account, you will have to file a separate information return for each account.

If you need to file early due to bankruptcy or if your business stops operating, you are required to file within 30 days from the date your business ends.

If the owner of a business dies, the T4 slips and T4 Summary have to be filed within 90 days from the date of death.

You must file information returns by Internet if you file more than 50 information returns (slips) for a calendar year. More information is available at the CRA website, here: Filing Information Returns Electronically (T4/T5 and other types of returns).

General filing information:

* Please keep in mind that if the deadline falls on a weekend or public holiday, for federal income tax purposes, your return is filed on time if it is received or it is postmarked on the next business day.

As well, you should note the difference in “received” dates the CRA adheres to.  The CRA considers something to have been received by a taxpayer once the CRA sends that item out to a known address they have on file.  On the other hand, the CRA does not consider your paperwork or payments as being received until the CRA actually has said cheque or return in hand and stamps it with their postmark.  Mailing something on February 28th which is due February 28th is likely going to result in a penalty for late filing.

* In cases where an individual dies, the final income tax return must generally be filed on or before the regular filing deadline for the year OR six months after the date of death of the individual – whichever is later.

* There will be no income inclusion for an operating cost benefit if an employee fully reimburses the employer for all operating expenses, including GST/HST and PST, relating to the personal use of the automobile within 45 days after the end of the calendar year.

* An employee who has received a low-interest loan from an employer during any part of the year is deemed to have received a taxable employment benefit that is calculated as interest at the CRA’s prescribed rate for the period during which the loan was outstanding. The amount of the benefit is reduced by any interest actually paid on the loan within 30 days of the end of the calendar year.

* Where a family member has loaned funds to another family member or to a family trust, the income attribution rules may not apply on the related investment income where interest on the loan is charged at a rate at least equal to the prescribed rate that was in effect when the loan was made and where interest on the loan is paid by January 30 of the following year.

* In the case of a general corporation, the due date for the balance owing for a taxation year is generally the last day of the second month following the end of the year. In addition, provided certain conditions are met, the due date for the balance owing for CCPCs is the last day of the third month following the end of the taxation year.

* Corporations are required to pay monthly tax installments during the year if their total taxes payable (which is specifically defined) for the current or preceding taxation year is more than $3,000.

* In cases where the taxation year-end of the corporation is the last day of the month, installment payments are due on or before the last day of each month or each quarter. Where the taxation year-end of the corporation does not fall on the last day of the month, the first installment is due one month or quarter less a day from the first day of the corporation’s taxation year-end. Subsequent installments are due on the same day of each of the following months or quarters.

* CCPCs may pay quarterly installments if the following conditions are met:

  • The corporation’s taxable income, and that of any associated corporations, for the current or previous year does not exceed $500,000;
  • The corporation claimed the small business deduction in computing its tax payable for the taxation year or for the preceding taxation year;
  • The corporation’s taxable capital employed in Canada, and that of any associated corporations, does not exceed $10 million in the year or in the preceding taxation year; and
  • Throughout the 12 months ending at the last installment payment date, the corporation made all tax remittances and filings under the Income Tax Act, Employment Insurance Act, Canada Pension Plan or GST/HST section of the Excise Tax Act on time.

* The due date of a GST/HST return is determined by the reporting period. If the reporting period is monthly or quarterly, the GST/HST return must be filed and any amount owing must be remitted no later than one month after the end of the reporting period. If there is an annual reporting period, the GST/HST return must be filed and any amount owing must be remitted no later than three months after the end of the fiscal year. Please note that an individual with business income for income tax purposes, who is also an annual filer with a December 31 fiscal year-end, must file their GST/HST return by June 15 and pay their net GST/HST owing by April 30 to avoid penalties and interest.

* Information returns that include T4, T4A, T4A-NR and T5 must be filed on or before the last day of February in each year and shall be in respect of the preceding calendar year.

* An NR4 Information Return must be filed on or before the last day of March or in the case of an estate or trust, no later than 90 days after the end of the estate’s or trust’s tax year. An NR4 Information Return must be filed in respect of payments such as interest, dividends, royalties or pensions made to non-residents in the preceding calendar year.

* In cases where all members of the partnership are individuals (including trusts), the T5013 is due no later than March 31 of the calendar year following the year in which the partnership’s fiscal period ended. In cases where all members of the partnership are corporations, the T5013 is due no later than five months from the end of the partnership’s fiscal period. In all other cases, the T5013 is due on or before the earlier of (i) the day that is five months after the end of the fiscal period, and (ii) the last day of March in the calendar year immediately following the calendar year in which the fiscal period ended or with which the end of the fiscal period coincides.

 

Good news if you are ready to get filing, because the 2014 General Income Tax and Benefit packages are available at post offices as of early February, and the first day you can use NETFILE was February 9th, 2015.

Thursday Thirteen Tax Tips: 13 Important Considerations Before Hiring Tax Representation

Trying to decide if it is time to hire a tax representative is a difficult decision and if made incorrectly, can cost hundreds if not thousands of dollars plus add significant amounts of stress and reputational damage to you and / or your business.

With so many people and organizations on the Internet promising to do so much for you, how do you know who to trust and more importantly, how can you tell if the specific tax matter you have is something they have experience (and success) handling?

Well, I’m going to give you some tips, so feel free to share them, about how I would go about finding a tax expert for my situation and what important questions you need answered before you hand over your hard-earned money, Social Insurance Number (SIN) and / or Business Number (BN).

The first thing that you must be comfortable doing is asking questions and if you do not understand the answer or if it seems like the response you get is part of a sales pitch, then think twice and get another quote.  It’s okay.  Anyone offering these services will either expect that you have spoken to more than one person, or will be confident that their expertise is what you need and know that you will come back.

Do they offer a free consultation?  It’s helpful if you do not know exactly how much trouble you are in, if at all, and having a few minutes to ask will put your mind at ease and help build a relationship for the future if it’s necessary.

During a 15-minute free consultation I usually do not know how many other tax representatives they have spoken to, if any.  As a result, I have to be clear, honest and set the price based on the amount of work involved, only.  It works for me, and it works for my clients.

keep-calm-youre-hired

Once I begin working with clients I get to hear what others promised, or wanted to charge, and often times I am surprised both by the recommended course of actions and the price quoted / charged.I thought it might be a good idea to expand on this topic and provide the 13 IMPORTANT considerations to look for before hiring tax representation:

13) Knowledge – Does this person or organization have significant knowledge in the area you need?

12) Experience – Knowledge is great to help you understand more, however, is their knowledge based on books they studied in school, or was it gained through hands-on experience?  If you are lucky, you can get both.

11) Fit – Can you work with them? Are they able to explain in a manner that you actually understand what happened, and what the next steps are.

10) Advertising – Odds are good that if they are spending a lot of money on advertising, they are going to have to charge you more in order to re-coup the costs.  A lot of advertising doesn’t necessarily mean they are the best, it just means they value advertising, or need clients..

9)  Social Media Presence – Taking into consideration that people do NOT advertise they have a tax problem online, it can be difficult to see if your prospective tax representation is worth your hard-earned dollars.  A good way to check up on a prospective hire is to have a look at their followers and who they follow.  It may seem great that a firm will have 5000 followers, however, followers can be bought, so a Canadian firm with 3000 followers from, say, Turkey might be a tip-off that something is not right.  Also look at their posts and comments via mainstream media.  Are they commenting on articles to educate or does everything they publish and promote look like it has been written by a marketing firm aimed at trying to get you to hire them.

8) Flexibility – Are they flexible in their pricing, or are they so set in their fees that they will not, or can not, recommend someone else or reduce their fees to assist.

7) Promises – Do they promise to save you money through reviews of your tax filings or do they take the easy way out and recommend bankruptcy, or a proposal?

6) Fear Mongers – If you notice that the tone of everything coming from a prospective firm / representative seems like they are trying to scare you, they are, and that’s a good sign to proceed with caution.  If they tell stories of the CRA hiding in your bushes, reading your emails or coming to arrest you, you should think twice.

5) What is their catch? – You know what you need, but what do they want, or what do they want from you?  There might be additional things relating to your tax issues that you did not know about and would benefit you, but if it’s not necessary and they won’t back away from it – like a financial analysis – then be concerned that they just want to put you though a cookie-cutter program instead of working towards solving your problem(s).

4) Do they play nice with others? – Blog posts aside, are they active in community networking groups (like on Linked In) and are they contributing to the discussions or do they have their own agenda and are just posting articles aimed at the wrong crowd – ie/ pitching their services to individuals in a group full of tax lawyers.

3) Sticks and Stones – How do they  refer to the Canada Revenue Agency?  Do they call the CRA the “Taxman”?  Do they have other negative nicknames?  I can tell you with the experience that 10-plus years of working for the CRA has afforded me that the CRA HATES that and do you really want your representation to start your negotiations off on the wrong foot?

2) Which Way is Up – Does their projected course of action come with terms, such as; “I think, this will work” or “I can try this…” or does the word “maybe” come up a lot?  The good part of that language is that it is a sign that they want to try a course of action and they expect the outcome to be positive or they have no clue what to do and after they run you through their cookie-cutter service, they hope you will be in a better situation.

1) You are Smarter – If you finish your conversation and get the feeling that once all is said and done you will be in a much better place both mentally and financially and you are armed with enough information and understanding of what got you there in the first place and that you can and are able to identify and address all future issues, then you might just be in the right place!

Good luck!

 

Warren

Think the Canada Revenue Agency Treats Employees Differently? Think Again!

Former CRA employee fined and sentenced to 18-month conditional sentence for income tax evasion

Surrey, British Columbia.   The Canada Revenue Agency (CRA) announced today that Maria Victoria Banhaw of Burnaby, British Columbia, was sentenced on October 3, 2014 in Vancouver Provincial Court, after pleading guilty to one count of income tax evasion. Banhaw was fined $47,580, representing 75% of the total federal income tax evaded. She was also ordered to serve an 18-month conditional sentence, which includes 9 months of house arrest.

A CRA investigation determined that Banhaw, while employed at the CRA, prepared and filed personal income tax returns for herself, her husband and 34 family members and friends for the 2005 to 2009 tax years. On these 96 returns, Banhaw overstated the amount of Registered Retirement Savings Plan (RRSP) contributions in order to reduce taxable income and increase refund amounts payable. Banhaw’s family and friends were unaware that she made false claims on their returns. In total, Banhaw reported $389,417 in false RRSP contributions, resulting in $63,438 in taxes evaded.

The preceding information was obtained from the court records.

When taxpayers are convicted of income tax evasion, in addition to any fines, they must still repay the full amount of taxes owing, plus interest and any civil penalties that may be assessed by the CRA.  In addition, the court has the ability to fine them up to 200% of the taxes evaded and impose a jail term of up to five years.

If you have ever made a tax mistake or omission it is prudent to speak to us right away so that we can help you understand where you stand in the eyes of the CRA.  We will help you determine if you can handle it on your own – and set you up to do so, or recommend our services or the services of others to assist you through the process.

Key Deductions and Tax Credits for Persons Older Than 65-Years of Age

With the 2014 Tax Filing season rapidly approaching, I think it is important to keep track of key deductions and credits that Canadians older than 65-years-old should be thinking about when they file their Canadian tax returns this year and all years going forward.

The Canada Revenue Agency set up their own webpage dedicated just to this very topic: http://www.cra-arc.gc.ca/seniors/ which I recommend bookmarking, but I have summarized their points below for ease of access.

Common credits which may be claimed by seniors

  • Age amount
  • Pension income amount
  • Disability amount (for themselves)
  • Amounts transferred from a spouse or common-law partner
  • Medical expenses

Age amount

You can claim this amount if you were 65 years of age or older on December 31, 2013, and your net income (line 236 of your return) is less than $80,256. If your net income was:

It is important to remember to enter your date of birth in the “Information about you” area on page 1 of your tax return.

Remember to claim the corresponding provincial or territorial non-refundable tax credit to which you are entitled, on line 5808 of your provincial or territorial Form 428.

Tip: You may be able to transfer all or part of your age amount to your spouse or common-law partner or to claim all or part of his or her age amount. See line 326 – Amounts transferred from your spouse or common-law partner, for more information.

Pension income amount

You may be able to claim up to $2,000 if you reported eligible pension, superannuation, or annuity payments on line 115, line 116, and/or line 129 of your return.

Eligible pension income does not include the following income amounts:

  • any foreign source pension income that is tax-free in Canada because of a tax treaty that entitles you to claim a deduction at line 256;
  • income from a United States individual retirement account (IRA); or
  • amounts from a RRIF included on line 115 and transferred to an RRSP, another RRIF or an annuity.

Canada Pension Plan (CPP) income does not count as eligible income here.

Pension income splitting

If you qualify to claim the pension income amount, discussed above, then you are often able to report up to one-half of that pension income on your spouse or common law partner’s tax return, which will save you tax as a couple if your spouse is in a lower tax bracket.

Amounts transferred from your spouse or common-law partner

If your spouse or common-law partner does not need to claim some or all of certain non-refundable tax credits to reduce his or her federal tax to zero, you may be able to transfer those unused amounts to your return.

Split CPP income

If you and your spouse are at least 60 years of age, and one or both of you receive CPP benefits, each spouse may be able to apply to split their benefits with the other (i.e., report half on each other’s tax returns), which can save tax if one of you is in a lower tax bracket.

CPP contributions

If you are 60 to 70 years of age and employed or self-employed, you have to make CPP or Quebec Pension Plan (QPP) contributions, even if you’re receiving CPP or QPP benefits.

You can claim a tax credit for these contributions. However, if you’re at least 65 but under 70 years of age, you can elect to stop making contributions (use Form CPT30, the applicable part of Schedule 8 to your tax return, or Form RC381, whichever applies), but don’t just stop making the contributions without that election!

Medical expenses (for self, spouse or common-law partner, and your dependent children born in 1996 or later)

On line 330 of your personal tax return you can claim the total eligible medical expenses you or your spouse or common-law partner paid for:

  • yourself;
  • your spouse or common-law partner; and
  • your or your spouse’s or common-law partner’s children born in 1996 or later.

Medical expenses for other dependents must be claimed on line 331.

Tip:

You may be eligible to claim a variety of medical expenses, perhaps even previously unclaimed amounts, as long as the expenses were incurred in any 12-month period that ended in 2013. The list of eligible expenses has continued to expand slowly over the past few years.

It is wise tax-strategy to claim medical expenses on the lower-income spouse’s return to maximize your tax relief.

Disability amount (for self)

You can claim the disability amount of $7,697 on line 316 once you are eligible for the disability tax credit (DTC).

Tip:

If you were eligible for the DTC for previous years but did not claim the DTC when you filed your return, you can request adjustments for up to 10 years under the CRA’s Taxpayer Relief Provisions. To claim the disability amount for prior years, you will need to file Form T1-ADJ, T1 Adjustment Request, for each year you need to amend.

If you or anyone else paid for attendant care, or for care in an establishment, special rules may apply. For more information, see Attendant care or care in an establishment.

If you have a severe and prolonged physical or mental impairment, you may be eligible to claim $7,697 if a qualified practitioner certifies, on Form T2201 – Disability Tax Credit Certificate, that you meet certain conditions.

Public transit amount

You can claim the cost of monthly (or longer duration) public transit passes for travel on public transit within Canada for 2014. The cost of electronic payment cards can also be claimed when conditions are met.

Work force credits

If you’re still working, even part time, you may be eligible to claim the Canada employment amount (maximum $1,117) and the Working income tax benefit (see Schedule 6 of your return).

Registered plans

You’re entitled to make contributions to a registered retirement savings plan (RRSP) until the end of the year in which you turn 71-years-old.  Don’t forget to claim a deduction if you have made a contribution for 2014.

And if you’re eligible for the disability tax credit it is possible to make contributions to a registered disability savings plan (RDSP) to shelter income on those contributions from tax.

OAS clawbacks

Some seniors must pay back all or a portion of their Old Age Security (OAS) benefits if their income exceeds $70,954 (for 2013). If you’re in this boat, examine the types of income you’re earning to see if you can change the type of income earned to reduce the impact of these clawbacks going forward.

The Canada Revenue Agency (CRA) also administers the Ontario Trillium Benefit (OTB) which is the combined payment of the Ontario energy and property tax credit, the Northern Ontario energy credit, and the Ontario sales tax credit. The annual OTB entitlement is usually divided by 12 and the payments issued monthly. Your 2015 OTB payments, which are based on your 2014 income tax and benefit return, will be issued on the 10th of each month, starting on in July 2015.

Exceptions:

Starting with your 2014 income tax and benefit return, you can elect to receive your 2015 OTB in one payment at the end of the benefit year. If your annual 2015 OTB entitlement is over $360 and you make this election, you will get it in one payment in June 2016 instead of receiving monthly payments from July 2015 to June 2016.

If your 2014 OTB annual entitlement is $360 or less, it will be issued in one lump-sum payment in the first payment month (usually July).

 

These items often changes and some situations may be applicable to you, while other’s may not.  Please speak to your accountant or tax professional to be sure they apply.  If you claim a credit you are not entitled to, the CRA will disallow the credit and charge you interest from the date the returns were due.

 

#inTAXicating

Here is What is NEW for the 2014 Canadian Tax Filing Season

  • Children’s fitness amount – Under proposed changes, the maximum amount of eligible fees for each child has increased to $1,000.
  • Search and rescue volunteer amount – As a search and rescue volunteer, you may be able to claim an amount of $3,000.
  • Family Tax Cut – A proposed non-refundable tax credit of up to $2,000 is available to eligible couples with children under the age of 18, and is effective starting with the 2014 tax year.
  • Universal Child Care Benefit (UCCB) - Under proposed changes, this benefit is being increased for children under age six. Effective January 1, 2015, parents will be eligible for a benefit of $160 per month for each eligible child under the age of six – up from $100 per month. Under proposed changes to expand the UCCB, parents may also receive a benefit of $60 per month for eligible children ages six through 17. Payments of the additional amount and expanded amount will start in July of 2015.
  • Emergency services volunteers – Rules for the $1,000 exemption for emergency services have changed.
  • Adoption expenses – The maximum amount of eligible expenses for each child has been increased to $15,000.
  • Medical expenses – Amounts paid as salary for designing of personalized therapy plans for persons eligible to claim the disability tax credit and costs for service animals used to help manage severe diabetes, are now eligible as medical expenses.
  • Investment tax credit – Eligibility for the mineral exploration tax credit has been extended to flow-through share agreements entered into before April 2015.
  • GST/HST credit – You no longer have to apply for the goods and services tax/harmonized sales tax (GST/HST) credit. When you file your return, the Canada Revenue Agency (CRA) will determine your eligibility and will advise those who are eligible to receive the credit.  If you have a spouse or common-law partner, only one of you can receive the credit. The credit will be paid to the person whose return is assessed first. The amount will be the same, regardless of who (in the couple) receives it.
  • Online mail – When you register for online mail, you’ll have instant access to your tax records anytime, anywhere. Choose to receive an email notification that your notice of assessment or reassessment is available online. You can register for this service, which begins February 2015 by either adding your email address on your T1 return, or by registering directly at www.cra.gc.ca/myaccount.
  • Mobile application: In February 2015, the CRA will be launching a mobile app for individual taxpayers.

CRA online services make filing easier and getting your refund faster

The CRA’s online services are fast, easy, and secure. You can use them to file your income tax and benefit return, make a payment, track your refund, receive your notice of assessment, and more, which is great for keeping on top of your taxes and especially should there be an issue.

The only concern I have, surrounds the notice that the Government of Canada is switching to direct deposit for all payments that it issues? This includes your tax refund and benefit payments. They would like you to sign up for direct deposit.  More information is available here: www.cra.gc.ca/getready.  However, by providing the CRA with a bank source for direct deposit, also means that they have a source for collection purposes should you run into tax trouble and have a balance with the CRA.

Stay connected by subscribing to this blog, or to any of the CRA’s social media sites, below:

You can also visit our YouTube Channel for tax-related videos.

The Horse and Pony Protection Association (HAPPA) Sought Voluntary Revocation of Charitable Status From CRA

The voluntary revocation of the registered charitable status of The Horse and Pony Protection Association (HAPPA) as a result of a CBC investigation could leave Canadian Taxpayers who donated to this organization owing back monies to the Canada Revenue Agency (CRA).

Almost one year ago, the CBC Investigates reported on accountability issues at the Newfoundland charity after former members of the Board of Directors raised concerns about the operation of the group, which at the time continued to take donations from the public 18 months after closing its flagship horse sanctuary.

As a result of strict confidentiality guidelines, the Canada Revenue Agency (CRA) are unable to say who made the request to have HAPPA’s charitable status removed, however after the CBC investigation was published, the website was removed, and further investigation turned up a significant breach in reporting requirements on behalf of the charity as it would appear that they filed incorrect information with federal charity regulators, claiming that all board members are “arm’s length” from each other.

According to the CBC, the only current active members of the Horse and Pony Protection Association (HAPPA) board are what appear to be a mother and daughter and what appear to be a long-time couple.

Family members and common-law partners are considered “not at arm’s length” by the Canada Revenue Agency — something that can affect how the agency assesses a charity’s status.

Charities are required to file a form outlining those relationships and the CBC reported that on HAPPA’s website they found their filing for the year ending December 31st, 2011 in which there were 8 directors listed as being “at arm’s length” from each other.

The significance of the revocation of charitable status is that anyone who donated to the charity after that date, will not be allowed to claim the donation as a deduction from their income. If they do so anyway, the CRA will re-assess them plus penalties and interest. The Taxpayer Relief program will not granted penalty and or interest relief to those who donated to this charity, and in situations like these, as there are no categories to apply under.

Once the revoked, the charity should have transferred all of its remaining property — including cash — to an eligible donee, or be subjected to a revocation tax equal to the property’s full value.

If you have donated to this organization and are concerned that the CRA may disallow the charitable receipt, it is best to not submit it with your taxes. You have 4 years to claim charitable deductions.

November 14, 2014 National Philanthropy Day in Canada: Highlighting Tax Breaks for Charitable Donations

November 14th, 2014 is National Philanthropy Day here in Canada, and the Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P., Minister of National Revenue, was in Vancouver to applaud those Canadians who donate to charities and to remind Canadians to take advantage of the tax credits available for eligible charitable donations.

Receiving special attention was the new temporary donor super tax credit which provides an extra 25% federal tax credit on top of the original charitable donation tax credit which means that eligible first-time donors can get a 40% federal tax credit for monetary donations of $200 or less, and a 54% federal tax credit for the portion of donations that are over $200 up to a maximum of $1,000.

The donor super credit applies to donations made after March 20, 2013, and can only be claimed once between 2013 and 2017.

This is in addition to the provincial credits available.donation

Those who have donated before can still be eligible for the charitable donation tax credit, a non-refundable tax credit which allows taxpayers to claim eligible amounts of gifts to a limit of 75% of their net income.

For a quick estimate of your charitable tax credit for the current tax year, try the charitable donation tax credit calculator, which can be found here.

Minister Findlay also reminded Canadians that only Canadian registered charities and other qualified donees can issue official donation tax receipts.  This is extremely important because if you make a donation to a charity which is not eligible to issue donation tax receipts but they provide one anyways, the CRA will re-assess you for that donation deduction with penalties and interest.  A little due diligence up front goes a very long way.

If it seems too good to be true, it should give you reason for concern…

To find out if an organization is registered, go to the Canada Revenue Agency’s (CRA) website and search their complete list of registered charities in their Charities Listings.

For more information about donating, such as how to calculate and claim the charitable tax credit, go to the CRA’s site for making donations, which is here.

 

Some Quick Facts

  • Two years ago, Canada became the first country in the world to officially recognize November 15 as National Philanthropy Day.
  • There are more than 85,000 registered charities in Canada.
  • The benefit to charities of being a registered charity? Registration provides charities with exemption from income tax.
  • According to Statistics Canada, in 2010 almost half of all Canadians volunteered, giving more than two billion hours of their time. In addition, in 2012, 5.6 million tax filers reported charitable donations for a total of $8.3 billion in donations reported.
  • According to Statistics Canada, in 2012 the average age of charitable donors across the provinces and territories is 53 years old.
  • Follow the CRA on Twitter – @CanRevAgency
  • Follow inTAXicating on Twitter @intaxicating