Political Contributions in 2024

Governments leverage the Income Tax Act to collect taxes and promote social policy. The tax deduction for political contributions is a clear example of the ITA's role in shaping behaviour. With federal parties intensifying their fundraising efforts, I have prepared the following bullet-points to assist you when making political contributions in 2024.

1. Federal Contributions
   1. The maximum tax credit is $650, achieved with a contribution of $1,275
   2. You can legally contribute up to $1,725
      1. This amount increases by $25 per year
   3. The tax benefit rate declines as the contribution increases, as follows:
      1. 75% of the first $400 contribution is a $300 tax credit
      2. 50% of the next $350 contribution is a $175 tax credit
      3. 33.33% of the next $525 contribution is a $175 tax credit
         1. These credits do not change from year to year

   https://www.elections.ca/content.aspx?section=pol&dir=lim&document=lim2024&lang=e

2. Provincial Contributions (Ontario)
   1. The maximum tax credit is $1,622, achieved with a contribution of $3,690
      1. This amount increases annually by an increment based on inflation
   2. You can legally contribute up to $3,375 per political party
      1. Since the maximum contribution per party is $3,375, but you achieve the maximum benefit at $3,690, you will need to support more than one party to reach the maximum benefit
   3. The tax benefit rate declines as the contribution increases, as follows:
      1. 75% of the first $486 contribution is a $365 tax credit
      2. 50% of the next $1,135 contribution is a $568 tax credit
      3. 33.33% of the next $2,068 contribution is a $689 tax credit
         1. These credits do not change from year to year

   https://www.ontario.ca/page/political-contribution-tax-credit-individuals

3. Municipal Contributions
   1. Municipal contributions are not deductible on federal or Ontario tax returns.
   2. Some municipalities recognize the challenge their candidates face when fundraising and will provide a rebate to the contributor.
   3. Each municipality has unique rules, so we won’t attempt to document them.
      1. For an example, please follow the link to the City of Toronto’s rebate program
         https://www.toronto.ca/legdocs/municode/1184_053.pdf

   While these incentives are designed to foster political engagement, it's important to exercise caution. Over-contributing can have consequences, both for you as the contributor and for the party or candidate as the recipient. Being aware of these potential pitfalls is crucial when making political contributions.

   https://elections.ca/content.aspx?section=abo&dir=comp/nov2222&document=p6&lang=e