Tax Credits for Donations and Gifts in Canada and Quebec

Tax Credits for Donations and Gifts

Charitable donations can generate valuable tax credits at both the federal and provincial levels in Canada. The Canada Revenue Agency (CRA) offers a non-refundable charitable donation tax credit to individuals who contribute to registered charities, Canadian amateur athletic associations, and designated educational institutions.

The federal and Quebec tax systems both provide tax relief for eligible charitable donations. However, the calculation methods, rates, and claim procedures are different for each jurisdiction.

Federal Charitable Donation Tax Credit Rules

The federal charitable donation tax credit is calculated using two rates:

• 15% (14.5% in 2025) on the first $200 of total annual donations.
• 29% on the portion of donations exceeding $200.

For high-income earners whose taxable income exceeds the top federal tax bracket (approximately $246,000 in 2025), the rate on the portion above $200 can increase to 33%.

Donations made by either spouse or common-law partner can be combined to maximize the tax credit. Unused donations may be carried forward for up to five years.

Federally, charitable donations are claimed on Schedule 9 – Donations and Gifts and transferred to Line 34900 of the T1 Income Tax Return.

Quebec Charitable Donation Tax Credit Rules

Quebec also provides a non-refundable tax credit for donations made to registered charities and other recognized organizations.

The Quebec calculation is similar to the federal method but uses different tax credit rates:

• 20% on the first $200 of donations.
• 24% on the amount exceeding $200.

This credit is claimed on Schedule V – Donations and Gifts of the Quebec TP-1 Income Tax Return and reported on Line 395.

Similar to the federal credit, unused donations can be carried forward for up to five years.

Combined Federal and Quebec Tax Savings

When both federal and Quebec tax credits are considered together, the combined tax savings can amount to nearly 50% of the donated amount.

For example, a $1,000 donation typically results in a total tax reduction of about $494:

• Federal tax reduction: $262
• Quebec tax reduction: $232

To qualify for the credit, taxpayers must keep official donation receipts showing the charity’s registration number and the donation amount.

Claiming Donations on Quebec Tax Returns

For Canadian taxpayers, charitable donations and gifts can be claimed for a non-refundable tax credit on both federal and provincial income tax returns. The rules for calculating the credit and the specific amounts involved are different for federal and Quebec tax purposes.

You can claim the following tax credits on Line 395:

• The tax credit for charitable donations and other gifts.
• The additional tax credit for a large cultural donation.
• The tax credit for cultural patronage.

The Quebec tax credit rate is:

• 20% for the first $200 of donations.
• 24% or 25.75% for the remaining amount.

Donation Carry Forward Rules

You can carry forward an amount that you do not use to claim the tax credit for up to five years after the year of the donation.

Schedule V Requirements

If neither of the statements applies to your situation, you must complete Schedule V.

You must also complete Schedule V to claim:

• The tax credit for a large cultural donation for your first monetary donation of at least $5,000.
• The tax credit for cultural patronage for a monetary donation of at least $250,000 to the same donee.

Example – Charitable Donation Calculation

Sam is 55 years old and his net income is $45,000 (all Canadian source income). He donated $4,500 to a church in Montreal and donated $1,000 to a church in the United States. How much can he claim?

Answer: Sam can only claim donations made to Canadian charities. Donations made to U.S. charities can only be claimed against U.S. income.

Total donation Sam can claim on his tax return:

Donation Amount	Federal	Quebec
First $200	15% = $200 × 15% = $30	20% = $200 × 20% = $40
Remaining $4,300	29% = $4,300 × 29% = $1,247	24% = $4,300 × 24% = $1,032
Total	$1,277	$1,072

Federal and Quebec Donation Tax Credit Comparison

Feature	Federal	Quebec
First $200 Rate	15% (14.5% in 2025)	20%
Donations Over $200 Rate	29% for most taxpayers; 33% for individuals in the highest tax bracket.	24% for most taxpayers; 25.75% for those in the highest tax bracket.
Claiming Location	Schedule 9, Donations and Gifts. Reported on Line 34900 of the T1 return.	Schedule V, Donations and Gifts. Reported on Line 395 of the TP-1 return.
Annual Income Limit	Generally limited to 75% of net income; increases to 100% for certain cultural or ecological gifts.	No annual income limit on eligible donations.
Carry Forward	Can be carried forward for up to 5 years (10 years for certain ecological gifts).	Can be carried forward for up to 5 years (10 years for certain ecological gifts).
Pooling with Spouse	Spouses or common-law partners can combine donations on one return to maximize the credit.	Spouses or common-law partners can also combine their donations.
Publicly Traded Securities	Donating publicly traded securities eliminates capital gains tax on the appreciated value.	Donations of publicly traded securities are permitted, though the tax benefit calculation differs.
Cultural Gifts	Enhanced incentives for donations of certified cultural property to designated institutions.	Refundable credits for monetary gifts of $5,000–$25,000 to cultural organizations, and a separate 30% credit for larger gifts of patronage.

Important Points to Remember

• Charitable donations can provide non-refundable tax credits on both federal and Quebec tax returns.
• Federal and Quebec donation tax credits are calculated separately using different rates and claim procedures.
• Donations made by spouses or common-law partners can be combined to maximize the available tax credit.
• Unused donations can generally be carried forward for up to five years.
• Taxpayers must keep official donation receipts showing the charity registration number and donation amount.