Is Crowdfunding Taxable in Canada?

Different kinds of crowdfunding

Whether crowdfunding income is taxed depends on the type of campaign—in particular, why you’re raising the money and what contributors get in return.

Typically, funds that resemble a gift—where donors make contributions without receiving anything in return—are not deemed taxable, whereas funds that resemble business income are.

Here’s how common types of campaigns generally break down.

Generally not taxable	Generally taxable
Personal fundraising: Raising funds for a person’s medical expenses, such as a campaign supporting a relative’s cancer treatment.	Business crowdfunding: Using a platform to raise startup capital, such as launching a small bakery.
Charitable fundraising: Collecting donations for a cause, like funding clean drinking water systems in a developing country through a registered charity's campaign.	Reward-based crowdfunding: Backers pledge funds in exchange for a future product, like a campaign for a new tech gadget or board game.
Debt crowdfunding: Small loans are pooled from individual lenders instead of one financial institution to issue a line of credit, for example	Creator and fan-supported income: Ongoing support from subscribers, such as monthly pledges or tips.

Is crowdfunding taxable?

It depends. What matters is the arrangement between you and your contributors. If you receive money with no strings attached, that is considered a gift. But when someone hands over cash and receives a product, a reward, a service, or some other type of ongoing perk, the CRA starts seeing it as income, and so should you.

That’s why it’s smart to track every dollar from the day your campaign launches, not just at tax time. Your total take can trigger obligations you didn’t see coming.

GST/HST registration, for instance, becomes mandatory once your taxable sales top $30,000 in a single calendar quarter or over four consecutive quarters. After that, you have to charge GST/HST on your sales and remit it to the CRA. Contributions where backers get nothing in return generally aren’t subject to GST/HST.

Crowdfunding is generally not taxable when it resembles:

• A personal gift
• Funding to cover costs for a personal hardship or medical campaign
• Donations collected by registered charities, which are generally exempt from income tax

However, crowdfunding might be taxable when it involves:

•     Business ventures and startup capital raised through platforms 
•     Product pre-sales or reward- or perk-based campaigns
•     Creator income, including content subscriptions and similar support channels
•     Ongoing fan support tied to content or access
•     Income earned in exchange for services, perks, or rewards

In these cases, the funds are typically treated as business income and must be reported to the CRA.

To avoid headaches later, don’t mix personal and business fundraising. For example, don’t run a business campaign through a personal account, which can make it harder to distinguish gifts from income.

Does the CRA monitor crowdfunding campaigns?

If you’re a creator or an influencer using a crowdfunding or subscription-based platform to earn money, note that Canada has reporting rules for digital platform operators that facilitate the sale of goods or services, requiring them to report users’ income and other information directly to the CRA. (Gig platforms also have to do this.)

Crowdfunding platforms must also report any large or suspicious transactions to FINTRAC, Canada’s anti-money laundering regulator.

Learn more about influencers and taxes.

Are crowdfunding costs tax-deductible?

If crowdfunding proceeds are treated as business income and contributors do not receive any equity in the company, any expenses you incurred to run the campaign—such as shipping charges, manufacturing costs, or platform fees—can generally be deducted as business expenses, the same way any other cost of earning income would be.

“It’s important to treat crowdfunding the same way you would any other business,” says Banda. “That means keeping receipts for expenses like production, shipping, platform fees, and marketing. This matters as much as tracking the funds coming in.”

Tax deductions reduce your total taxable income. Learn more about making small-business tax deductions.

Are crowdfunding contributions tax-deductible?

Typically, no. Unless a registered charity runs the campaign and issues an official donation receipt, supporters generally can’t claim a charitable tax credit for their contributions.

Only registered charities and other qualified donees can issue an official donation receipt, so contributions to a personal campaign, like a campaign for a friend’s medical bills, are not eligible.

If a registered charity raises money through a crowdfunding platform, it can issue receipts for eligible gifts it receives, as long as it receives and controls the funds, and has the information the CRA requires, such as each donor’s full name and address.

Crowdfunding can sometimes be a form of investing, if contributors receive a financial return (interest or equity, for example). But profits aren’t guaranteed, and investors might never recoup their initial contribution.

Record-keeping for crowdfunding campaigns

Here are some tips to help you with record-keeping:

• Track contributions: Keep a list of amounts received, dates, and the purpose of each contribution. Save transaction emails and other documents.
• Review platform reports: A lot of crowdfunding platforms will issue year-end summaries that you can compare to your own records. (Note: crowdfunding platforms don’t issue tax slips like the T4A or tax receipts. Only a registered charity can issue a donation receipt for a gift it receives.)
• Track expenses and the purpose of each: Hang on to receipts for platform fees, shipping, marketing and other campaign-related costs and make note of what each expense was for. Remember to save a copy of your campaign page, too, as it shows what you originally raised money for and what your contributors were promised.