Charitable donation tax credit 2026: 14% on $200, then 29% or 33%

What are the 2026 federal donation credit rates next to 2025?

For 2026 the first $200 of gifts earns 14%, because that slice uses the lowest federal rate, which Bill C-4 cut to 14.5% for 2025 and 14% from 2026 on canada.ca. Everything above $200 earns 29%, and the part of it that lines up with taxable income in the top bracket earns 33% instead laws-lois.justice.gc.ca.

The $258,482 threshold is where the 33% bracket starts for 2026 canada.ca. The 2025 Schedule 9 uses 14.5% on the first $200 and an income threshold of $253,414 canada.ca. The 2026 Schedule 9 isn't out yet as of October 2026, so the 2025 form is the latest one published canada.ca.

How does Schedule 9 split a gift between 14%, 29% and 33%?

The formula sits in ITA 118.1(3): A × B + C × D + E × F. B is the lesser of $200 and total gifts, credited at the lowest rate. D is the lesser of gifts above $200 and taxable income above the top bracket threshold, credited at the highest rate. F is whatever is left, credited at 29% laws-lois.justice.gc.ca.

Take a client with $120,000 of taxable and net income who gave $5,000 in 2026. Their income sits well below $258,482, so D is zero and nothing reaches 33%.

Now a client with $300,000 of taxable and net income who gave $50,000. The 75% limit is $225,000, so the whole gift is claimable this year. Taxable income above $258,482 is $41,518, which is less than the $49,800 of gifts above $200, so $41,518 gets 33% and the remaining $8,282 gets 29%.

The gotcha is assuming a top bracket client gets 33% on every dollar above $200. They only get it on as many dollars as their taxable income sits above the threshold. A large gift from a client just over $258,482 is credited mostly at 29%.

What limits how much your client can claim in one year?

Your client can claim gifts up to 75% of net income from line 23600 canada.ca. The Act raises that limit by 25% of the taxable capital gains and recapture that come from gifting capital property, so the formula is 0.75 of income plus 0.25 of those amounts, capped at income laws-lois.justice.gc.ca.

The amount you claim is the eligible amount: fair market value minus any advantage your client received. The CRA's example is a $1,000 donation with $150 of benefits, which leaves an eligible amount of $850 canada.ca. Every claim needs an official donation receipt from a qualified donee canada.ca.

Gifts of publicly listed shares can carry a zero inclusion rate on the capital gain canada.ca. That's its own planning topic, covered in donating securities.

When does carrying gifts forward beat claiming them now?

Unclaimed gifts can be carried forward to any of the next 5 years, or 10 years for ecologically sensitive land canada.ca. In a later year, gifts carried forward must be claimed before the current year's gifts, and each amount can only be claimed once, so keep a running schedule of what was used.

Two cases favour waiting. A client who gives under $200 a year gets 14% on all of it every year, while bunching three years of $150 gifts into one $450 claim puts $250 at 29%. And a client who expects a top bracket year soon (a business sale, a large bonus) can hold gifts back so more of them line up with income above $258,482 and earn 33%.

Waiting has a limit: a gift unclaimed after the fifth year is gone.

Should spouses pool their donations on one return?

Usually yes. The Act counts gifts made by the individual or their spouse or common law partner, so either partner can claim both sets of receipts laws-lois.justice.gc.ca. Each portion can only be claimed on one return canada.ca. Medical expenses pool the same way but usually favour the lower income spouse; see the medical expense threshold.

Pooling means the 14% slice applies to $200 once instead of twice. On $1,000 of combined gifts, one return gets $28 plus $232 ($800 × 29%), or $260. Two returns claiming $500 each get $28 plus $87 apiece, or $230. Pick the partner with taxable income above $258,482 if there is one, because only their return can unlock 33%, and check that partner has enough tax to absorb the credit.

What changes in the year of death?

In the year of death the limit rises to 100% of the deceased's net income, and any excess can be claimed on the return for the preceding year, also up to 100% of net income for that year canada.ca. For deaths after 2015, a gift made on death is deemed made by the estate when the property is transferred to the donee laws-lois.justice.gc.ca. That's where the graduated rate estate rules come in, with a window of no more than 36 months after the death canada.ca. See the final return for a deceased person for the rest of that filing.