Your Support Needed for Canada’s Stretch Credit Proposal
(Dec. 8, 2009) AFP members in Canada are urged to contact their Members of Parliament in support of the stretch tax credit that would encourage larger gifts by Canadian donors.
This past August, AFP submitted its pre-budget consultation brief to the House of Commons Standing Committee on Finance. In its brief, AFP recommended the adoption of a stretch tax credit (originally developed by Imagine Canada with direct input from AFP members).
The Canadian government seems receptive to this proposal, so AFP is urging its Canadian members to please contact their Members of Parliament in support of the stretch tax credit.
How the Stretch Credit Works
This stretch tax credit would apply to donated amounts above $200 that exceed a donor's previous highest giving level. This new measure would be based on an individual tax payer's best previous year of giving using 2008 as a baseline. It would provide a "stretch tax credit" of 39 per cent on these new donations--10 percentage points higher than the current level of tax credit on donations above $200.
To continue benefitting from the stretch tax credit in subsequent years, tax payers would need to continue to increase their levels of giving over their 2008 and previous year's baselines. This measure is intended to encourage charitable giving by all Canadians (particularly middle-income earners) who wish to give for the first time or to give more in response to current needs--up to a maximum of $10,000.
The maximum benefit would be $980 if used in one year (i.e. a one-year increase from $200-$10,000 in giving), though it is likely that for many, the increased benefit would be incrementally achieved over several years.
The stretch tax credit would benefit charities of every size and in every region and should, over time, broaden the base of donors and increase the giving levels of Canadians across the country. It would also complement recent incentives encouraging gifts of assets aimed primarily at higher-income Canadians with an initiative that is less exclusive and recognizes that most Canadians donate income rather than assets.
What Can You Do?
Please contact your Members of Parliament and urge them to support the stretch tax credit. In the attachments section below, you will find a draft letter that you can use as a template. It is vitally important that you contact your Member of Parliament as soon as possible.
If you need any assistance, please contact Jason Lee, AFP's director of government relations, at firstname.lastname@example.org.
Thank you for your help!
Related AFP ResourcesSummer 2009 Public Policy Update
Congress Reaches Deal on IRA Rollover, But Major Hurdles Remain
Fundraisers to Converge in Toronto for Congress 2014
Charities, Fundraisers Call New Tax Plan a “Mixed Bag”—Appreciate Simplification, Concerned About Impact on Giving
Wrapping Up 2012: Important Tax Reminders for U.S. Nonprofit Professionals