What is the First-Time Donor’s Super Credit?
The First-Time Donor’s Super Credit (“Super Credit”) was announced by the federal government in Budget 2013. It adds 25 percentage points to the federal charitable tax credit for eligible donors.
How are “first-time donors” defined?
For the purpose of the Super Credit, a person is a first-time donor if:
- they have never claimed the charitable tax credit;
- their spouse has never claimed the charitable tax credit;
- they have claimed the charitable tax credit, but only in 2007 or before;
- their spouse has claimed the charitable tax credit, but only in 2007 or before.
What donations are eligible?
Cash donations made after March 21, 2013, are eligible for the Super Credit. The Super Credit itself will apply for claims made in the 2013 through 2017 income tax years.
There is a $1000 limit on donations that will attract the Super Credit.
If somebody donates $20 this year, but $500 next year, does that mean they only get the Super Credit for the first $20?
The Super Credit applies to the first claim that an eligible taxfiler makes. Donors have up to five years to claim tax credits on their donations. Accumulating donations could be an effective strategy for some people.
If the individual in this scenario claimed the $20 donation on their 2013 income taxes, the Super Credit would only be applied to this amount, returning $5.00 to the donor. However, if they waited until 2014 and claimed both years’ donations, the Super Credit would apply to the full $520, returning $130 to the donor.
Does the Super Credit only apply to the first charity a person donates to?
No. As long as a person is eligible to claim the Super Credit, they can claim it on all of their donations (to a maximum of $1000) in the year of their choice up to and including 2017.
How many people will be eligible for the Super Credit?
Department of Finance officials estimate that up to 590,000 families are currently eligible. This includes single individuals and couples. The pool of eligible donors will be renewed each year, primarily through a combination of new immigrants to Canada becoming tax filers, and young people reaching the age at which they become tax filers.
How does the Super Credit work with corporate matching-gift programs?
The Super Credit has no effect on any corporate match. You are still credited for charitable donations made, which are then matched in accordance with company policy. The Super Credit affects (reduces) the net cost of your donation, not its amount.
How much is the Super Credit expected to generate in new donations?
The Budget estimates the incremental cost of the Super Credit at $25 million a year. This equates to $100 million in new donations.
Can the Super Credit help donors to give more?
Yes. It enables donors to give more to causes that are important to them at no additional cost. For example, an eligible donor can now make a $50 donation for the exact same net cost as a $40 donation before the Super Credit, regardless of income level.
Can you give me an Example?
Sure. If you are a donor from Quebec, a $360 donation ($15.00 per pay x 24 periods) costs you $205.20 without the Super Credit. If you are eligible to claim the First-Time Donor’s Super Credit, the cost becomes $115.20. In other provinces the difference is as follows,
*If eligible. This Table is for information only and represents the effect of current tax credits available to all filers. Individual benefit will be determined by personal income level and tax circumstances.
Where can I find more information?
For a complete listing of gift costs by Province and a detailed benefit of the First-Time Donor’s Super Credit, please visit http://www.imaginecanada.ca/node/18