New! Charitable Donation Tax Credit Calculators

Fall is a great time for year-end tax planning and this year, strategic philanthropy in the family has taken on new meaning in light of the new temporary First-Time Donor’s Super Credit for first time donors.

To help with tax literacy as philanthropy is discussed with younger family members, advisors and their clients may wish to try two new online calculators to determine the value of the credits. One is developed by the Canada Revenue Agency (“CRA”) and one by Knowledge Bureau. 

The charitable donations tax credit is a non-refundable credit that can be used to reduce federal and provincial taxes. Those who qualify as first time donors may receive an additional 25% credit on the first $1,000 of donations made after March 20, 2013. For others, the federal credit is 15% of the first $200 given and 29% of the amounts above this. The new first time donor’s credit rates are calculated as illustrated in the chart from CRA’s website below:

Provincial tax rates are applied above this. This makes the calculators complicated.

Knowledge Bureau’s Donations Savings Calculator is a relatively simple calculator, but can be used for more complicated planning situations: 

1. It shows the taxpayer’s actual federal, provincial and total taxes payable before and after the donation as well as the tax savings.
2. It shows the net cost of the donation as well as the tax savings.
3. It allows for the donation to include gifts of publicly traded shares (excluding the tax on the gain and including the tax reduction in the savings as well as the net cost of the gift.

The Knowledge Bureau’s Donation Savings Calculator also shows all the relevant information in a compact display not requiring scrolling to enter data or view the results. A free trial is available here.

The CRA calculator is available here: http://www.cra-arc.gc.ca/chrts-gvng/dnrs/svngs/clmng1b2-eng.html?rss

To ascertain qualifying donations, see:

• Which organizations can issue official donation receipts?
• What types of gifts qualify for charitable tax credits?
• How do I calculate my charitable tax credits?

The calculator is very useful and allows taxpayers to input their province or territory, the tax year and the amount donated to calculate their tax credit for the year. The CRA reminds taxpayers that the calculator only produces an estimate and does not take into account all possible tax situations.