Charitable Donation Tax Credit: Donating Cash vs Securities
- The first $200 of donations in the year uses the lowest federal rate. For 2026 that rate is 14 percent. Department of Finance's June 2026 report ties non-refundable credits to that rate cut.
- Donations above $200 use 29 percent federally, and 33 percent on the slice matched to income taxed at 33 percent. The 33 percent bracket starts at $258,482 of taxable income in 2026.
- Gifts of shares, mutual-fund units, and certain other listed securities to a qualified donee can have a capital-gains inclusion rate of zero, plus a receipt for fair market value. Selling first and donating the cash does not.
- The general annual limit is 75 percent of net income. Unused gifts can be carried forward five years. Spouses can claim the family's gifts on one return.
- Donations count in the calendar year they are made. There is no RRSP-style grace period in the first 60 days of the next year. December 31 is the deadline for a 2026 claim.
How much is the federal credit on a cash gift?
The credit is non-refundable. It reduces tax you otherwise owe. It does not pay you a refund if you have no tax. The rate is not your marginal rate. It is a schedule: a low rate on the first $200 of total gifts for the year, and a higher rate after that. People who donate $100 a year for a decade leave the higher rate unused. Bundling several years of giving into one calendar year, or combining both spouses' receipts on the higher-income return once the first $200 is absorbed, is the mechanical version of that fact.
| Portion of the year's donations | Federal credit rate |
|---|---|
| First $200 | 14 percent, the lowest federal rate |
| Above $200 | 29 percent |
| Above $200, to the extent taxable income is taxed at 33 percent (over $258,482) | 33 percent |
Table as of September 2026. Provinces and territories add their own credit, on their own schedule. This page does not quote a provincial dollar, because those rates are not one national table. Claim the provincial credit on the provincial schedule. The credits people miss more broadly are in missed tax credits.
First $200 × 14 percent = $28. Remaining $800 × 29 percent = $232. Federal credit = $260. That is not $1,000 times your marginal rate. If you are not in the 33 percent bracket, none of the $800 moves to 33 percent. If your taxable income is above $258,482, a further 4 percentage points can apply to the portion of the gift above $200 that is matched to that top-bracket income, which is how 29 percent becomes 33 percent. Provincial credit is extra and is not in the $260.
Why is a gift of securities different?
CRA's page on gifts of certain capital property says you may be entitled to an inclusion rate of zero on a capital gain from donating, among other things, a share or debt listed on a designated stock exchange, a mutual-fund share or unit, and an interest in a related segregated fund trust. You still receive a donation receipt for the fair market value. You file Form T1170 and report the disposition on Schedule 3 as that form instructs. The ordinary inclusion rate, for a sale that is not this gift, is one-half, and the history of that rate is the capital gains guide.
The gain is $6,000. Sell, then donate the cash: one-half of $6,000 is a $3,000 taxable gain. At a federal marginal rate of 26 percent, used here only as the third federal bracket, federal tax on that inclusion is $780, and you then claim the donation credit on $10,000, which is $28 plus $9,800 × 29 percent = $2,870. Donate the shares in kind: the inclusion on the gift is zero, so the $780 of federal tax on the gain is not there, and the federal credit on the $10,000 fair market value is still $2,870. The $26 percent and the $780 are an illustration of one federal bracket, not a combined provincial bill. Timing matters. The transfer has to be in the charity's hands in the calendar year. A letter of direction in the last week of December can miss.
Since 2024, alternative minimum tax includes 30 percent of the capital gain on donated listed securities, and it allows only 80 percent of the donation credit. A gift that is painless under regular tax can still produce Form T691 tax. Read the AMT guide before a large December transfer.
What are the limits and the timing rules?
- 75 percent of net income is the general ceiling for the year. In the year of death, and the year before death, the ceiling is higher. Confirm the current line 34900 instructions if the gift is large relative to income.
- Five-year carryforward. Gifts you do not claim this year can be claimed in any of the next five years. The first $200 threshold is annual, so a carryforward claimed in a later year can join that year's gifts above $200.
- Either spouse can claim. Pooling receipts on one return usually beats splitting them, because the first $200 at 14 percent would otherwise apply twice. The couple version of income planning is income splitting for couples.
- December 31, not March 1. An RRSP contribution in the first 60 days of 2027 can still be a 2026 deduction. A donation in January 2027 is a 2027 gift.
- The charity must be a qualified donee. CRA's charity listings are the check. A crowdfunding page, a foreign organization, or a political contribution is not this credit. Political contributions have their own credit, with its own cap.
Frequently asked questions
Is the donation credit the same as a deduction?
No. A deduction, such as an RRSP contribution, reduces taxable income. The donation credit reduces tax, at 14 percent on the first $200 and 29 percent after that, federally. It is not worth your marginal rate unless that rate happens to match. People who multiply the gift by their marginal rate are describing a deduction they do not have.
Should I sell the shares and donate the cash?
Usually not, if the shares are listed and are in a gain, and the charity can accept them. The in-kind gift can zero the capital gain and still produce a receipt for fair market value. Selling first realizes a gain at the one-half inclusion rate and then donates whatever cash is left after tax. Losses are different: a share in a loss is often better sold, so you can use the loss, and the cash donated.
Do I have until the RRSP deadline to donate?
No. Charitable gifts are tied to the calendar year. A donation on January 5, 2027 is not a 2026 credit. If the gift is securities, leave enough time for the broker and the charity to settle the transfer before December 31.
Can I claim my spouse's receipts?
Yes. Spouses and common-law partners can combine donations on one return. That is usually better than each person using up a fresh first $200 at 14 percent. The receipt still has to be from a qualified donee, in one of your names or both.
What if the gift is bigger than 75 percent of my income?
The unclaimed portion is not lost. It carries forward up to five years, still subject to the limit in the year you claim it. A very large gift relative to income is also an alternative-minimum-tax question, especially if the gift was securities. Do not assume the credit will all land in the year of the gift.
Does this credit apply to a GoFundMe or a US charity?
Only if the organization is a qualified donee under Canadian rules. Many crowdfunding campaigns and foreign charities are not. Search CRA's list of charities before you count on a receipt. A US gift can qualify in narrow treaty cases. That is a form question, not a default.
Sources
- CRA: line 34900, donations and gifts
- CRA: capital gains on gifts of certain capital property
- Department of Finance, June 2026: lowest rate of 14 percent for 2026, and the donation credit
- CRA: 2026 brackets, including the 33 percent rate above $258,482
The receipt is worth more when the gain is not taxed.
Credits, carryforwards, and the rest of the return are the filing problem. The 2026 tax guide is that companion, $49 CAD.
Get the 2026 Tax Guide — $49 CAD
