As a general rule, registered charities are allowed to issue official donation receipts in the amount of the fair market value of the gift received. These receipts may be filed with an individual’s income tax return. The resulting charitable tax credits reduce the amount of income tax a person would otherwise have to pay. Tax credits reduce the tax payable on both the federal and provincial portions of income tax owing. Because of differences in the provincial tax systems, savings produced by tax credits vary across Canada.
Tax credits make generosity more affordable. You may be able to make a larger planned gift than you thought possible, without undue sacrifice on the part of yourself or your heirs.