By Terrance S. Carter and Jacqueline M. Demczur

On January 23, 2025, the Department of Finance released draft legislation to amend the Income Tax Act, extending the deadline for making charitable donations eligible for “tax support” in the 2024 tax year to February 28, 2025. The release of draft legislation was a follow up to the announcement by the Department of Finance on December 30, 2024, concerning  the Government’s intent to introduce amending legislation as reported in our article posted on January 3, 2025.

Notwithstanding that Parliament has been prorogued and amending legislation will not be introduced until sometime after February 28, 2025, the chances of implementing legislation not being introduced is no longer of any practical concern.  This is because it would be extremely unlikely  that any political party would vote against remedial tax legislation that assists all charities in Canada as well as tens of thousands of donors who support those charities.

The draft legislation aims to address challenges caused by the Canada Post mail stoppage in late 2024, providing donors with more time to ensure their contributions are received and processed. Further details on the draft legislation and the requirements for eligible donations can be found in the Department of Finance’s explanatory notes. The Canada Revenue Agency (“CRA”) has confirmed that it will administer the extension as proposed, ensuring that taxpayers and charities have clarity during the tax season.

Key Information for Individual Donors

The specifics of the draft legislation as it affects individual taxpayers are as follows:

• Individuals may claim eligible charitable donations made to charities and other qualified donees (“QDs”) up to February 28, 2025, on their 2024 personal income tax return if they choose to do so.
• Donations must be in the form of cash, cheque, credit card, money order, or electronic payment. As such, gifts in kind do not qualify for the extension.
• Donations made via payroll deductions or under a will of an individual that died after 2024 also do not qualify for the extension.
• If donors choose not to claim  donations made in 2025 before March 1, 2025, in their 2024 taxation year, they may claim them for 2025 or carry them forward for up to five years.

Key Information for Graduated Rate Estates (GREs) and Corporations

The specifics of the draft legislation as it affects corporations and GREs are as follows:

• Corporations and GREs must have a taxation year that ended after November 14, 2024, (which was the beginning of the Canada Post mail stoppage) and before January 1, 2025.
• If a corporation or a GRE meets the taxation year end condition and makes a gift to a charity or other QDs before March 2025, it may claim the eligible amount of the gift on its 2024 corporate income tax return (for corporations) or its 2024 trust income tax and information return (for GREs).
• If the corporation or the GRE does not deduct the donation on its 2024 corporate or trust income tax return, as applicable, then it can still deduct the amount on its 2025 corporate or trust income tax return or carry forward the amount for five years.

Key information for Charities and Other QDs

• Charities and other QDs are not required to issue separate donation receipts for gifts received during the extension period up to February 28, 2025, but may choose to do so as a courtesy to assist taxpayers who may wish to claim such donations in their 2024 taxation years.
• The date of donation for in-person or electronic donations is the date the charity or other QD receives the gift.
• The date of donation for mailed donations is the postmark date on the envelope.

The CRA has stated that this extension will not affect how charities and other QDs report tax-receipted revenue on their T3010 Registered Charity Information Return (“T3010”). Charities must keep detailed and organized records and continue reporting all official donation receipts issued during their 2025 fiscal period on their 2025 T3010.