Giving to charity is great for the soul. It can also be good for your tax return. When it comes to volunteering, however, the situations in which such work makes you eligible for a tax credit are limited.
When Volunteering Can be a Tax Deduction
Typically, volunteering your time won’t earn you a tax credit. However, if you volunteered as a firefighter, or search and rescue team member, you may be eligible to claim your hours of service.
If you volunteered in this capacity for at least 200 hours in the year, you can claim $3,000 for the volunteer firefighters’ amount (VFA), or the search and rescue volunteers’ amount (SRVA), but you can’t claim both. If you volunteered as both a fightfighter and a search and rescue team member, you can combine your hours for both activities and claim the total hours toward one of the credits. For more detail on the services you can claim toward your volunteer hours, please click here.
Tax Deductions for Charitable Giving
Donations of money, household items, art or real estate made to a registered charity typically qualify for the charitable giving tax credit.
To claim the credit, the registered charity must give you a tax receipt for your gift, which will include the charity’s registration number and identifying information, the date, and the value of your gift. If you received an advantage for your donation, such as event tickets or dinner, the charity will deduct the amount of your advantage from the value shown on your receipt. Remember that only registered charities can give a charitable receipt, so make sure you verify their status with the CRA before donating.
Also, if you made charitable donations through payroll deduction, gather your T4 slips! Qualified donations you made through your employer are shown in Box 46. After you have this information, work on your T1 return until you’ve figured your income on line 236; then complete Schedule 9 to calculate your charitable donation credit. Regardless of whether you file electronically or on paper, keep copies of your donation receipts and any T4 slips showing charitable donations for six years after you claim your credit.
Don’t Forget the Credit for First Timers
First introduced in 2013, the First-Time Donor’s Super Credit gives an extra boost to your donations credit if you’re a qualified new donor. For cash donations up to $1000, the FDSC adds an extra 25% credit. 2017 is the last year to claim the FDSC, so remember to take advantage of this super credit this year!
Other tips for maximizing your charitable donations:
- Pool Your Donations with your Spouse: Because total donations of over $200 garner a bigger deduction, be strategic at tax time. If both you and your spouse have given, pool both your donations and assign the total to the spouse who will receive the larger benefit. Software such as TurboTax Standard allows user to optimize donations and view the best bottom line for each donation claim.
- Carry Forward your Donation: Charitable donations don’t need to be claimed in the year they were made. In fact, you can hold on to those donation receipts for up to five years and claim them all at once in a single tax year. If you are claiming a number of credits this year, check to see if your donation would be better claimed in a future year. Donation credits are nonrefundable which means that if you are already in a position where you don’t owe any tax, you won’t benefit from claiming the credit.