Government puts out draft bill while CRA gives guidance on which gifts are eligible
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The government and the Canada Revenue Agency (CRA) gave further details this week on the extension of the charitable donation deadline for the 2024 tax year.
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In late December, the federal government announced that it intends to amend the Income Tax Act to extend the 2024 charitable donation deadline until February 28, 2025. The extension was meant to “mitigate the impacts of the four-week Canada Post mail stoppage,” since many charities rely on mass mailing campaigns each December, and donor response to those solicitations may have been significantly affected due to the postal strike.
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On January 23 the Department of Finance released draft legislation (and related explanatory notes) to amend the Income Tax Act to formally extend the deadline for making donations eligible for tax support in the 2024 tax year to February 28.
Parliament is currently not in session, and voters may face a spring election, potentially killing any bills waiting to be passed. But, in order to “help provide certainty as we head into tax season” the CRA in a release confirmed it will go ahead with administering the 2024 deadline extension for charitable donations. Administering proposed legislation, rather than waiting until it is passed, is consistent with its longstanding practice.
The draft legislation provided further details on how the extended deadline will be applied, and which types of donations will be eligible. Specifically, the government said that only donations made in the form of cash or cheque, credit card, money order or electronic payment will qualify for the extension. Notably, gifts made via payroll deduction and gifts of property or appreciated securities won’t qualify for the extension.
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Individuals have the choice of claiming eligible gifts made up to February 28 on their 2024 personal income tax return, their 2025 return, or during the normal five-year carryforward period.
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Corporations that have a taxation year that ended after Nov. 14, 2024, and before January 1 are also eligible for the extension for eligible donations made during the extension period.
The CRA noted that charities are not required to issue official donation receipts specific to the extension period, but they may wish to do so as a courtesy to their donors.
Jamie Golombek, FCPA, FCA, CFP, CLU, TEP, is the managing director, Tax & Estate Planning with CIBC Private Wealth in Toronto. Jamie.Golombek@cibc.com.
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