Not only does donating your unwanted and gently used furniture to us have a charitable reward – all donations go directly to a family or individual transitioning out of homelessness or displacement – it also helps to reduce your tax bill come the end of the financial year. Here’s how you benefit financially from your furniture donation to us.
1. Your furniture donation to us qualifies for a tax credit
According to Canada Revenue Agency (CRA), “if you or your spouse or common-law partner made a gift of money or other property to certain institutions, you may be able to claim a federal and provincial or territorial non-refundable tax credit when you file your return.”
As Furniture Bank is a registered charity (registration number: 872531843RR0001), gently used furniture donations valued at $20 or more qualify for a donation in kind / gift in kind tax receipt for the value of the donated furniture. A donation or gift receipt (that looks like this) is an official document that states the amount of a monetary or in-kind donation (in this case, the value of your donated furniture) which you will use when completing your tax return and applying for a tax credit.
2. How you benefit
The Government of Canada as well as provincial governments offer support to those who have made donations or charitable gifts during the tax year. For example, the federal tax credit is 15% for donations below $200, and 29% for donations above $200. Generally, your tax savings will be equal to the amount of the charitable tax credit calculated.
Further, if you’re a first time donor, you may be eligible to receive an additional federal tax credit of 25%. Yet, despite these sweeteners, Imagine Canada suggests that not very many Canadians take advantage of the tax credit: “in 2010, only 23.4% claimed the charitable tax credit, down significantly from the almost 30% who did so in 1990.”
So remember to claim your tax credit on all charitable donations when you file your tax return.
3. What determines the amount of your donation / gift receipt
According to the CRA, the donation or gift receipt must reflect the fair market value of the gift. As such, your donation / gift receipt will be issued for the total value of your donated furniture items. If you are booking a pickup with us, the call centre associate dealing with your case will be able to tell you the estimated tax receipt value of your items.
4. How to receive your gift in kind tax receipt from us
All furniture donations to us are eligible for a gift in kind receipt. Once we receive your items (either via our furniture pickup service or a drop-off at our warehouse), we will set to work on the gift in kind receipt for your donation. This will usually be ready within a week and will either be emailed or posted to you. Please make sure to tell us to who the receipt should be made out and how you would like it delivered when booking your pickup or dropping off your items.
Also note, when dropping off your furniture, please request, fill out and sign a drop off form. This must be completed and provided to furniture bank staff at the time of the drop-off in order to receive your gift in kind tax receipt.
If you have any questions about your tax receipt from Furniture Bank, please contact firstname.lastname@example.org
5. Where you can find more info
Here’s a list of useful sources about claiming tax credits on donations and gifts to charitable organizations:
- Giving to Charity
- Donations and gifts
- First time donors’ super credit
- Charitable donation tax credit calculator