Starting in the 2013 taxation year, CRA introduced a temporary non-refundable FDSC to supplement the regular charitable donation tax credit (“CDTC”) for individuals. The new credit effectively adds 25% to the rates used in the calculation of the CDTC for up to $1,000 of monetary donations. As a result, a first-time donor will be allowed a 40% federal credit for donations of $200 or less, and 54% federal credit for the portion of donations in excess of $200 but not exceeding $1,000.
An eligible first-time donor claims $500 of charitable donations in 2013. All of the donations are donations of money. The first-time donor’s FDSC and CDTC would be calculated as follows:
|First $200 of charitable donations claimed:||$200 x 15% =|
|Charitable donations claimed in excess of $200:||$300 x 29% =|
|First-Time Donor’s Super Credit:||$500 x 25% =|
|Total FDSC and CDTC:|
As the FDSC is a temporary credit, you can only claim it once from the 2013 to 2017 taxation years.
For the 2013 taxation year, an individual will be considered a first-time donor if neither the individual nor the individual’s spouse or common-law partner has claimed the CDTC in any of the five preceding tax years.
Only donations of money that are made after March 20, 2013 will qualify for the FDSC. For taxation years from 2013 to 2017, a new line will be added to Schedule 9, Donations and Gifts to identify the eligible portion of the charitable donations that you have claimed that are donations of money.