Legislation to Extend the Deadline to Make Charitable Gifts

November 29, 2012 | Kate Lazier

On
October 31, 2012, Bill C-458 – the National
Charities Week Act
received first reading in the House of Commons of
Canada.   The Bill proposes to extend the
annual deadline for individuals to receive tax recognition for charitable gifts.
It also proposes to designate the last seven days in February each year as
“National Charities Week.”

Currently,
individual taxpayers must make gifts to registered charities and other
qualified donees before December 31 each year in order to claim the resulting
tax credit in the individual’s income tax return for that year or the next five
years.   Bill C-458 proposes to extend the deadline to
allow individual taxpayers to claim the tax credits from gifts made in the
first 60 days of a calendar year in the individual’s tax return for the
previous calendar year.   This would make
the deadline for charitable tax credits the same as the deadline for RRSP
contributions.

Bill
C-458 does not propose to change the rule for corporations making a charitable
gift.  Corporations will still need to
make charitable gifts before the end of the taxation year end in order to claim
the corresponding charitable deduction in that year.

Peter
Braid, the Member of Parliament from Kitchener-Waterloo, introduced bill C-458
as a private member’s bill.  Mr. Braid is
part of the House of Commons Finance Committee study of charitable donation
incentives.  The Committee’s mandate is
to study proposed tax measures to encourage charitable giving.   The Committee has not yet released its
findings.   In introducing the bill Mr.
Braid stated:

“As we know, charitable organizations play an important role in our
society. It is vital that we support this excellent work and continue to invest
in the strength of our communities. That is exactly what my private member’s
bill would do.

I am proposing that the tax deadline for charitable donations be moved
to the end of February during tax preparation season to raise awareness of the
available tax credits and to encourage increased giving. At the same time,
national charities week at the end of February would highlight and celebrate
the important work of our charitable sector.”

In the past, the charities sector has made
requests for increased tax incentives for charitable gifts, such as the stretch
credit and a capital gains exemption on real estate.  We have not seen the introduction of these measures
and it will be interesting to see if the House of Commons Finance Committee
makes recommendations regarding these measures.   In the meantime, perhaps the extension of
the deadline to make gifts is within the fiscal reach of the government.  Hopefully these measures will assist
charities to raise further funds and process them at a time of year when more
staff members are available.

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