Donations and Taxes
The effect on your personal income taxable payable for cash donations
On the first $200.00 of donations made by an individual, there is a tax credit of 25.8%. On any amount above that, the tax credit is 46.4% if your taxable income is below $205,842.00.
Example 1
On a donation of $2,000.00 by an individual having less than $205,842.00 in taxable income, the tax credit would be as follows:
$200.00 @ 25.8% = $51.60
$1,800.00 @ 46.4%* = $835.20
Total tax credit** = $886.80
*The rate of 46.4% applies to your donations over $200.00 regardless of your tax bracket up to the $205,842 bracket as noted in the following example.
**This tax credit is deducted directly off of your taxes payable for the year.
If your taxable income is above $205,842.00, the amount of income above $205,842.00 can earn a higher tax credit after deducting the first $200.00 of donations.
Example 2
On a donation of $20,000.00 by an individual having $210,000.00 in taxable income, the tax credit would be as follows:
$200.00 @ 25.8% = $51.60
$9,800.00 @ 46.4% = $4,547.20
$10,000.00 @ 50.4% = $5,040.00
Total tax credit* = $9,638.80
*This tax credit is deducted directly off of your taxes payable for the year.
Notes on cash donations
Donations used in a single year are limited to 75% of your net income.
Donations can be carried forward for up to five years.
The tax rates in our example are calculated using Manitoba provincial tax rates. These rates may differ if you pay taxes as a resident of a different province.
Donation of Securities
Another option for supporting this project is a donation of securities, which may offer additional tax advantages to the donor including not having to report the capital gain. Contact Linda MacNair at (204) 745-3006 or email at boynelodgecharity@gmail.com to discuss this option.