POLITICAL CONTRIBUTIONS FOR PERSONAL AND BUSINESS

FOR PERSONAL

Federal political contributions are donations that were made to a registered federal political party or a candidate for election to the House of Commons.

For Ontario, an individual taxpayer on their 2021 T1 personal tax return can receive up to 75% of the first $427 donation as credit, followed by 50% of any amount between $427 and $1,423 and 33.3% of amounts in the range of $1,423 and $3,238. The maximum contribution amount you can claim is $1,423 which translates into a maximum credit of $650.

To claim this credit, you must save all official political tax donation receipts as proof of contribution. The eligible amount is the fair market value of the contributions without any advantages that you might receive by making this contribution, such as meals (dinner).

This is a refundable tax credit and can be claimed by each spouse provided you have separate receipts.  If you plan to contribute more than $427, it is better if you split the contributions such that each of you have a separate receipt.  This way, each can claim tax credits at the higher rate.  Remember, you need to keep all your receipts and documents for six years.

FOR BUSINESSES

The amount of this non-refundable tax credit generally depends on the corporation's total eligible contributions and its income tax payable for the tax year.

The maximum tax credit that a corporation can claim in a tax year is $2,294. This is based on the maximum allowable annual contributions of $19,950.

If you would like to learn more or to set up a consultation call Marlies Y Hendricks, CPA at 416-766-3941.

The above information is of a general nature only and should not be relied upon for specific situations.