If you or a relative have not been making charitable donations and are considering doing so for the first time, 2017 would be the best year to start.
The normal federal tax credit for charitable donations is 15% on the first $200 of donations per year, and 29% on all others — but 33% to the extent the taxpayer’s income is in the 33% (top) federal tax bracket (which for 2017 means over $202,800 in taxable income). In addition, there is a provincial credit which varies by province and income level. Typically the combined credit for donations after the first $200 in the year is in the 40-50% range.
However, from 2013 through 2017 there is a “stretch” credit (or “super” credit) provided for new donors. If you (and your spouse or common-law partner) have not claimed a donation credit for any year after 2007, then the credit on the first $1,000 of donations is an extra 25% of the amount donated. This increases the total credit significantly, and means the real cost of donating up to $1,000 to charity in 2017 becomes quite low.
This measure was introduced in 2013 as a five-year temporary incentive. The March 22, 2017 federal Budget has confirmed that it will be allowed to expire at the end of 2017 as planned.
So if you are eligible for the credit, consider making charitable donations in 2017. Your money will go further.