In charitable donation credits, what is the maximum percentage of income that can be deducted in the current year?

In charitable donation credits, what is the maximum percentage of income that can be deducted in the current year?

• A. 25% of income
• B. 50% of income
• C. 75% of income
• D. 100% of income

Answer: (C)

Donations to registered charities in Canada generate a non-refundable tax credit, and there’s a limit on how much of your net income you can offset with charitable gifts in a single year. That limit is 75% of your net income. If you donate more than that in one year, the excess can be carried forward for up to five years to be used against future years’ net income. The tax relief comes through the federal (and provincial) donation credits, which reduce taxes payable rather than reducing income directly. So you can apply up to 75% of your net income in the current year, with any excess carried forward.

Donations to registered charities in Canada generate a non-refundable tax credit, and there’s a limit on how much of your net income you can offset with charitable gifts in a single year. That limit is 75% of your net income. If you donate more than that in one year, the excess can be carried forward for up to five years to be used against future years’ net income. The tax relief comes through the federal (and provincial) donation credits, which reduce taxes payable rather than reducing income directly. So you can apply up to 75% of your net income in the current year, with any excess carried forward.