By giving to uOttawa you can get a generous credit on your federal and provincial income tax, through the Charitable Donations Tax Credit.
For annual donations under $200, you will receive a tax credit of about 15 cents per dollar donated on your federal income tax. For donations exceeding $200, you receive about 29 cents for every dollar donated.
The provincial tax credit varies depending on the province in which you live. For example, in Ontario, a $1,000.00 donation would provide a federal tax credit of $262.00 and a provincial credit of about $99.00, so you would pay about $361.00 less tax for the year in which the donation was made.
First-time donors (i.e.; neither you nor your spouse has claimed a charitable donation tax credit for any year after 2007) are eligible for an additional 25 per cent credit from the federal government. For an Ontario resident making a first-time donation of $1,000.00, the total tax credit would be about $611.00 — more than half the value of the donation.
To estimate your tax credit, see the tax credit calculator on the Canada Revenue Agency website. <broken link, please verify if the new one is correct>
For specific and accurate information about your personal tax situation, we encourage you to consult with a qualified financial advisor.
Immediate tax benefits
If you purchase a new policy:
By making the University of Ottawa the owner and beneficiary of the policy, you receive immediate tax-creditable receipts for any premiums paid. You then continue to pay the premiums and receive a charitable tax receipt for those payments. This designation cannot be changed.
If you transfer an existing policy:
By making the University of Ottawa the owner and beneficiary of the policy, you receive an immediate tax-creditable receipt for the policy’s market value. Any continued premium payments also qualify for a charitable tax receipt.
Deferred tax advantages
When you name the University of Ottawa as the beneficiary of the policy (but not as the owner of the policy), your estate is entitled to a tax-creditable receipt for the death benefit. The gift remains outside the estate and is not subject to probate fees.
Additional Tips about the Tax Benefits of Donations
- Charitable donations may be claimed up to an annual limit of 75% of net income (100% for gifts made in the year of death, including testamentary gifts such as bequests).
- Individuals and corporations who donate shares or other securities get a tax break on any resulting capital gain.
- Unclaimed charitable donations can be carried forward up to 5 years. But you have to claim donations you carried forward from a previous year before you claim donations made in the current year.
- Either spouse can claim a charitable donation tax credit, regardless of which spouse’s name is on the charitable donation receipt.
