Updated February 2026

A Guide to Political and Charitable Donations in Canada

As we head into the 2026 filing season, many Canadians are looking for ways to lower their tax bill while supporting the causes they love. Whether you’re a philanthropist at heart or just looking for a strategic way to manage your 2025 income, understanding the tax rules for donations is essential.

Here is everything you need to know about making your generosity count on your 2025 tax return.

Political Donations: Supporting Our Democracy

Participating in the democratic process is vital, and one way to do that is by contributing to the political party or candidate of your choice. Only Canadian citizens and permanent residents can make political donations at the federal level.

It’s essential to know the contribution limits, which are adjusted annually. The most up-to-date limits are on the Elections Canada website (linked below).

Transparency is key in political donations. Donations over $200 are publicly disclosed, so your name, city, and postal code will be associated with the donation. Additionally, federal and some provincial governments offer tax credits for political donations, which can help offset the cost.

Charitable Giving: Making a Difference

Supporting charitable organizations is an excellent way to give back to your community and contribute to causes you care about. Whether supporting local food banks, environmental initiatives, or health research, your generosity can make a real difference.

To ensure your donation is eligible for tax benefits, it must be made to a registered charity or qualified donee.  Sometimes, it is smarter to make a monetary donation instead of contributing items.  The rules about providing tax receipts for non-monetary donations are very specific, and often, the donor might be disappointed that they don’t get a tax receipt. 

For instance, you cannot provide a grocery receipt as evidence of a donation to a food bank – give money instead.

The Canada Revenue Agency (CRA) website (link below) has a comprehensive list of eligible recipients. Like political donations, federal and provincial/territorial governments offer tax credits for charitable contributions.

The Charitable Tax Credit: How It Works

In Canada, donations to registered charities are not a “deduction” (which lowers your taxable income); they are a non-refundable tax credit (which directly reduces the tax you owe).

For the 2025 tax year, the federal credit is calculated in two tiers:

1. The First $200: You receive a credit of 14.5% on the first $200 of your total donations.
2. Anything Over $200: You receive a credit of 29% on the remaining amount.
   • Note: If your taxable income is over $253,415, the credit rate for donations above $200 may jump to 33% on the portion of donations made from that high-income bracket.

Deadlines and Limits

Unlike the previous year, there are no special extensions this time around.

• The Deadline: To claim a donation on your 2025 return, the gift must have been made by December 31, 2025.
• The 75% Rule: You can generally claim charitable donations up to 75% of your net income for the year. Any amount above this can be carried forward.

Resources:

• Elections Canada: For information on federal political donations, contribution limits, and disclosure rules.
• Charities and Giving – CRA This is for guidance on charitable donations, eligible recipients, and tax credit details.

New for 2025, if you are a high-income earner subject to the Alternative Minimum Tax (AMT), be aware that you can only claim 80% of your donation credits against your AMT. If you’re planning a very large donation, it’s more important than ever to consult with us to ensure you’re getting the maximum benefit.

The 80% Rule Explained

Previously, you could use 100% of your charitable donation tax credits to offset your AMT.

• The Limit: You can now only claim 80% of your donation tax credits when calculating your AMT.
• The Math: Since the federal AMT rate is 20.5% and the highest donation credit rate is 33%, the 80% restriction effectively brings the credit down to about 26.4%. This is still higher than the 20.5% AMT rate, meaning that for many, cash donations alone won’t trigger AMT, but they provide less “cushion” than they used to.

A Few Friendly Reminders:

• Always check the official websites of Elections Canada and the CRA for the most up-to-date information and specific details. Tax laws can change, so staying informed is crucial.
• Keep all your donation receipts in a safe place. These are essential for claiming your tax credits.
• Although some donations to US charities can be claimed, not all are eligible, and donations outside of Canada and the US cannot be claimed. 
• If you have any questions, please contact us. We’re always happy to help you navigate the world of taxes and donations.

Whether through political or charitable donations, giving back is a truly rewarding experience. We hope this information helps you make informed decisions and maximize your impact. Happy giving!