Tax Benefits of Charitable Donations

In Canada, we have access to several tax benefits regarding charitable donations. In Ontario, specifically, key tax incentives make donating to charity a generous act and a wise financial decision.

Canada has a very generous tax credit system for people who donate to charities. Charitable donations are not only a way to give back to your community, but they also come with tax benefits in Ontario. Donating to registered charities can lower your taxable income, which can ultimately lead to a lower tax bill. 


The Charitable Donations Tax Credit

The Charitable Donations Tax Credit (CDTC) can go up to 33% of the amount you donated at the federal level. Provincially, you can reach up to 24% of your donation, depending on your province.    This means that you can claim the credit against any taxes owed but cannot receive a refund for any unused portion of the credit. 

Donating to registered charities can lower your taxable income, reduce your capital gains tax liability, and even reduce your estate’s tax burden. Plus, you get the added benefit of knowing that you are positively impacting your community, and you can get a sense of fulfillment and satisfaction, knowing that you are directly contributing to your community.


How to qualify for an official tax receipt

In order to qualify for the CDTC, you must make a donation to a registered charity, or public organization, that can issue tax receipts. You require a tax receipt in order to receive the credit. 

It’s important to note that you must donate to a registered Canadian charity to be eligible for these tax benefits. If you want to ensure your chosen charity qualifies,  the Canada Revenue Agency’s website maintains a list of eligible charities, or you can call them to confirm whether a charity is registered and eligible to issue official donation receipts at 1-800-267-2384. It is also important to keep in mind that there are donation schemes. The CRA also has information about avoiding fraud so you can donate safely to your registered charities of choice. 

Donating to charity in Ontario is an excellent way to support causes you care about and positively impact your community. There are countless organizations in Ontario doing important work in areas such as healthcare, education, and the environment.


Donate money, but not cash

You can also donate money in other forms than cash and still get a tax receipt. Stocks, mutual funds, exchange-traded funds, or other capital assets that have appreciated in value can also be donated. You will not pay any tax on any capital gains for what you donated. 

At The Grow Share, if you do not need all of your fruit off of your trees, we will happily donate them to a local charity and send you a tax receipt for $3.50 per pound of fruit. Ensuring that everything that is grown will not go to waste. 

Overall, the tax benefits of charitable donations in Ontario make giving back to your community a more rewarding experience. By taking advantage of these incentives, you can support important causes and reduce your tax burden. Therefore, consider donating this year and giving back to those in need.

If you want to learn more about how The Grow Share helps our community by giving access to freshly grown fruits, contact us to learn more.