Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Whether it is possible to claim a 75% tax credit in respect of two separate contributions of $100 each in a year
Position:
No
Reasons:
The wording of the law is clear. The second $100 of contributions would be at the 50% rate.
972607
XXXXXXXXXX M. Eisner
October 17, 1997
Dear Sirs:
Re: Political Donations
This is in reply to your letter of September 16, 1997 concerning the above noted subject.
In your letter, you have referred to two separate types of political contributions available for 1997. One type relates to a contribution prior to the issuance of a writ of election whereas the other one is made after a writ of election is issued. Your concern is whether a person can take advantage of the tax credit for 75% of the first $100.00 rule twice, if the person makes a contribution of at least $100 in each noted time frame in the 1997 taxation year.
By virtue of subsection 127(3) of the Income Tax Act (the Act), a tax credit may be claimed in connection with contributions made to a political party or an officially nominated candidate in respect of a federal general election. With respect to allowable contributions made in a particular year, subsection 127(3) of the Act provides that the tax credit is the total of (i) 75% of the first $100, (ii) 50% of the next $450, and (iii) 33 1/3% of the next $600 contributed. The maximum amount that may be claimed annually is $500. As a result of the manner in which the total is calculated, it is not possible to claim a 75% tax credit in respect of two separate contributions of $100 each in a year. The second $100 of contributions would be at the 50% rate.
For your general information, we have enclosed a copy of page 37 of the 1996 General Income Tax Guide which sets out general information on the federal political contribution tax credit. This information is currently relevant to the 1997 taxation year as there have not been any legislative changes.
We trust that our comments will be of assistance to you.
Yours truly,
John F. Oulton
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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