We’ve all heard it, “Canadians, we’re so giving”.
In fact, we are so giving that the Government of Canada has extended the charitable giving deadline from the standard Dec. 31, to Feb. 28, 2025, given the postal interruption that affected those who mail cheques.
In other words, any charitable giving you complete by Feb. 28 this year will be reported on your 2024 tax return.
However, there is some basic detail you should know about regarding the rules surrounding giving to a cause that will ensure a donation you give is actually recognized as a charitable donation by CRA, and therefore a tax deduction for you.
This is nothing to do with the February extension, these are the standard rules.
If you have given to worthy causes during 2024 and have some charitable tax receipts in-hand or some on their way to you, check them before simply claiming them on your tax return or they may be rejected by Canada Revenue Agency (CRA).
The reverse of this applies too.
If you are involved with the completion of charitable tax receipts for distribution by a charity to its donors, take your efforts seriously and be sure detail is accurate and complete.
The Tax Court of Canada is respecting the technical details required for the receipting of charitable gifts as set out by CRA.
The result of several recent cases has seen the Court uphold the CRA rules on what must appear on a charitable tax receipt, by denying charitable tax deduction claims that used non-compliant slips.
Why the close scrutiny by CRA?
Because of scam individuals and organizations acting as “registered charities," soliciting and receiving donations, and then issuing bogus slips to those who give.
Also, there are taxpayers acting on their own accord who make claims on their tax returns with non-legit charitable tax deductions, sometimes knowingly and sometimes not.
The classic and growing “cheat” or error is to report a “Go Fund Me” donation.
Unless the “Go Fund Me” gift is to a registered charity, it’s not an allowable tax deductible donation.
So, giving to a person or family in need doesn’t qualify as a charitable gift for tax purposes.
With this reality comes the need to enforce compliance by CRA.
And with enforcement comes hassles based on seemingly minute detail for legitimate organizations and lawful taxpayers, but nonetheless necessary enforcement due to the abuses.
So, whether you are a person giving donations or a person involved with making charitable tax receipts, here’s a brief description of the detail that charitable tax receipts must include to be accepted by CRA.
The name and address of the charity as recorded with the government.
If the charity moves, it’s not good enough to change only the slip or change only the address with the government.
Both must be changed and match.
The registration number of the charity, its serial number on the slip, where the slip was issued, the year the slip was issued, the year the gift was made, the date the receipt was issued, the name and address of the donor including first and last name, and even the middle initial of the donor … although this one, not so much on CRA’s radar.
If a portion of the gift was cash, the cash amount has to be identified on the slip.
If there was any benefit to the donor upon making the gift, for example a game of golf worth $100 was included in the $1,000 donation, then the gifted amount of $900 has to be identified on the slip.
The gifting of assets and property has to have its fair market value identified.
By the way, if reviewed by CRA, the value must have come from an independent third party.
The signature of an authorized person with the charity must be present on the slip.
And finally, CRA must be named on the slip and have its website identified.
Ron Clarke has his MBA and is a business owner in Trail, providing accounting and tax services. Email him at ron.clarke@JBSbiz.ca. To read previous columns visit www.JBSbiz.net.
