Political Contributions: Top Ten Canadian Tax Tips
March, 2023 (Updated) - David McConkey
1. New Rules
Recent changes to the Canada Elections Act and the Income Tax Act
provide limits and tax credits for contributions to
political parties. See Elections
Canada and Canada
Revenue Agency for detailed information. (Also check with the
appropriate agency in your province for provincial contributions.)
2. Where You Can Donate
You can donate to registered political parties, nomination contests, leadership contestants, and independent candidates. Obtain official receipts. (Questions? Check with Elections Canada and/or with the appropriate agency in your province.)
If paper filing your income tax return, you need to include your
receipts. If electronically filing, save your receipts in case CRA
asks for them later.
Donations made by one spouse / common-law partner can be claimed by
3. Watch Your Limits
To encourage participation by many ordinary people, businesses and
unions can no longer make political donations to federal political
parties. Only individuals can make these donations, and only to a
maximum of $1,675
per year (in 2022). (This increases by $25 in each subsequent
4. Generous Tax Credit
When you file your income tax return, you can take advantage of
a tax credit. The credit is much more generous than the tax
credit for charitable
donations. The federal political tax credit is:
- 75% of your contribution up to $400,
- 50% of the next $350, and
- 33-1/3% of the last $525 (but see maximum).
5. How To Calculate and Claim
40900 of the Income Tax Return, enter the total amount of your
contributions. A tax preparation program will then calculate your
credit. If calculating manually, using Line
41000 of the Worksheet for the Return, calculate your tax
credit, and then enter on
Line 41000 of the Income Tax Return.
6. Work Together As Spouses
Donations made by one spouse / common-law partner can be claimed by either one. So, spouses can work together to increase their credit. For example, if a couple has donated a total of $800, split the amount into two $400 donations to take advantage of the higher credit for donations up to $400. Also, if one spouse has a lower income and is not paying taxes (and so would not be able to claim the credit), claim the donation on the higher income spouse.7. Time Your Donations
You can get a bigger "bang for your buck" by contributing later in
the year. Make a $400 contribution in December, and you will receive
$300 of your contribution back just a few months later at income tax
8. Don't Forget To Vote
Participating during elections is important. Federal political campaigns can receive significant government reimbursement of their election expenses, so the impact of your contribution during an election can be augmented.
(The former program of providing a per-vote subsidy has been phased
out at the federal level, but something similar may apply in your
9. Check Your Province
Provinces have different rules for tax credits for contributions to
provincial political parties. Check your applicable province in
Tax and Benefit Guide.
10. Consider the Larger Picture - See Also:
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