Charitable Tax Credit

Currently, 82 per cent of all financial donations come from just 25 per cent of the donors. That 25 per cent needs to grow! The charitable tax credit will give Albertans a chance to show their giving spirit.

Alberta's tax credit has increased by more than 60 per cent for total annual charitable donations over $200. Including the federal tax credit, Albertans receive a 50 per cent non-refundable tax credit for every dollar donated over the $200 threshold. This includes donations made on or after January 1, 2007.

How do you take advantage of this new enhanced tax credit? Simply claim your total charitable donations on your next income tax return.

Everyone has their favourite cause or charity to support - whether it's a cause that has affected family members or friends, they are close to our hearts. The next time you decide to donate to your charity of choice, remember the charitable tax credit. Not only will the tax credit benfit you as a tax payer, through your donations it will help put money in the pockets of worthy charities across Alberta.

Making Your Charitable Donations Work Harder

Total Annual Donations*     Alberta     Federal     Total Tax Credit**
$500.00   $83.00   $117.00   $200.00
$1,000   $188.00   $262.00   $450.00
$2,000.00   $398.00   $552.00   $950.00
$5,000.00   $1,028.00   $1,422.00   $2,450.00
$10,000.00   $2,078.00   $2,872.00   $4,950.00
$25,000.00   $5,228.00   $7,222.00   $12,450.00

(Applies to Alberta taxpayers only)

* Total Annual Donations - When you make a charitable donation to a Canada Revenue Agency registered charity, you receive an official income tax receipt. You will receive a receipt for each individual donation you make.

** The charitable tax credit is non-refundable, which means you must be a taxpayer to benefit from the tax credit.

What you need to know

Charitable Tax Credit

Example

Here's how to calculate your charitable tax credit with total annual donations of $500. Detailed in structions are provided with your income tax return forms.

  1. Gather all your official charitable donation tax receipts and add them up (i.e. $100 to a youth shelter + $50 to a local food bank + $350 to a health organization = $500 in total annual donations).
     
  2. Provincial tax credit:
    1. On the first $200, the provincial tax credit rate is 10%, yielding a tax credit of $20.
    2. On the amount over $200, you receive a provincial tax credit of 21% (see note below). This would yield a tax credit of $63.
    3. When you add $20 + $63, your total provincial charitable tax credit is $83.
     
  3. Federal tax credit:
    1. On the first $200, the federal tax credit is 15%, yielding a federal tax credit of $30.
    2. On the amount over $200, you receive a federal tax credit of 29%. This would yield a tax credit of $87.
    3. When you add $30 + $87, your total federal charitable tax credit is $117.
     
  4. Your total combined provincial and federal tax credit is $200 ($83 + $117).

Effective January 2007, the Alberta government raised the charitable tax credit for eligible annual donations above $200 by 60 per cent. Including the federal tax credit, Albertans now receive a 50 per cent non-refundable tax credit for every dollar donated over the $200 threshold. This gives Alberta one of the highest charitable tax credits in Canada.