I, like most of the population, had never really thought about how donations related to politics were handled for tax purposes. I had always vaguely assumed that donations to any politician or party at any level would be handled the same. I had also figured that they would either be refunded for tax purposes the same as charities (17% of the first $200 and 34% after that) or the same as RRSP's where the amount contributed comes off your income so tax rate would be the same as your marginal tax rate. Which for most people who would be well off enough to give money to a politician or party would be between 34 and 40%.
Today based on some comments I saw on Facebook I did a little investigating. Here is what I found out:
-Donations to a municipal politican do not get you a tax refund (except in Toronto which has it's own rules).
-Donations at the Provincial level get refunded: 75% of the first $372, 50% of the next $868 and one third for anything above $1240 but it can't exceed $2481.
-Donations at the Federal level get refunded: 75% on first 400, 50% on 400-750 and a third from 750 to the max of 1275.
This really shocked me. I'm not entirely sure how I feel about it because I haven't given it enough thought yet. My knee jerk thought is the upside is it encourages people to contribute and get involved. The immediate downside reaction is that it's so much more than charities. I don't think I would support raising the charity one to the same level because then it's almost entirely government funded though. These are just quick thoughts though. Very surprising information though.
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