Budget 2024: Charities Update

The government of Canada has released its plan for the upcoming year in Budget 2024. Several items will be interesting to charities, not-for-profits, and donors. This article will give a brief overview of these items of interest.

Alternative Minimum Tax

The Alternative Minimum Tax ("AMT") is a separate tax calculation, which allows fewer tax benefits than ordinary income tax. The Charitable Donation Tax Credit ("CDTC") was not one of the benefits disallowed under the AMT. Where the AMT exceeds regular income tax, a taxpayer pays the AMT. Last year's Budget 2023 announced further reduction to benefits allowed on the AMT. In August, the government released proposed legislation which fleshed the changes out. The proposal cut the CDTC available on the AMT by 50%. This proposal could cause a big problem for charities; donors expect to receive a tax credit.