Donations Tax Credit

When a taxpayer has a spouse or common law partner and the combined donations are greater than $200, the donations for both spouses should usually be combined and claimed on one tax return.  Check your tax return carefully in relation to donations.  It is possible that by claiming all donations on one tax return, the donations may not be completely utilized.  If this is the case, you can either carry forward some of the donations, or split the donations between spouses.

In order to split donations between spouses in some tax software packages, you may have to manually override the field utilized for this purpose.  If you override the donations amount in the wrong form, the tax return may no longer be eligible for NetFile.  Some tax software packages allow this to be done without overriding an amount.

By splitting the donation between spouses, you are giving up the higher tax credit rate on $200 of donations, because there will now be $200 of donations at the lower tax credit rate for each spouse, instead of for just one spouse.

Both the Canadian Tax Calculator and the Québec Tax Calculator will alert you if your donations exceed 75% of net income, or if your donations are not fully utilized.

Donations need not be claimed in the year they are paid.  They can be carried forward for up to 5 years.  Under the CRA’s administrative policy, and as detailed in the CRA Technical Interpretation 2010-0377811E5, it is permissible for a charitable donation that was initially reported on one spouse or common-law partner’s return to be transferred to the other spouse or common-law partner in a subsequent year.

For more information visit the Tax Tips website