Budget 2024 Includes Revised AMT Change
On Tuesday, April 16 the Federal Government tabled Budget 2024: Fairness For Every Generation which, among other things, recognized that “charities and non-profits are the pillars of communities across Canada.”
The Budget notes that “since 2015, the federal government has worked in even closer partnership with the charitable and non-profit sector to deliver more support to Canadians.” It includes a list of previously announced funding and structural changes the government made to support our sector.
Of great interest to AFP Canada and fundraisers across the country are the two proposed changes to the Alternative Minimum Tax (AMT), initially announced as part of Budget 2023, that will disincentivize donations to charities. AFP Canada has been asking the government not to move forward with these changes, noting that they will result in less funding for charities, thus negatively impacting Canadians at a time when nearly one quarter of them expect to rely on charities to meet their basic needs.
The Tax Measures Supplementary Information that accompanied Budget 2024 included an update to one of the proposed amendments to the treatment of donations under the AMT:
“Budget 2024 proposes that the tax treatment of charitable donations be revised to allow individuals to claim 80 per cent (instead of the previously proposed 50 per cent) of the Charitable Donation Tax Credit when calculating AMT.”
There were no changes concerning the treatment of capital gains on donations of publicly listed securities in the AMT base. (As a reminder, Budget 2023 proposed “to include 30 percent of capital gains on donations of publicly listed securities in the AMT base, mirroring the AMT treatment of capital gains eligible for the lifetime capital gains exemption. The 30 percent inclusion would also apply to the full benefit associated with employee stock options to the extent that a deduction is available because the underlying securities are publicly listed securities that have been donated.”)
The next step is for these legislative changes to be presented as part of the Budget Implementation Act. If approved, these changes would be effective retroactive to January 2024.
Read what others are saying about the Budget:
- Amid charitable donations dip, federal government commits to further constrain giving and Budget 2024: Will a heightened recognition of nonprofits & charities clear a path toward foundational sector reforms?, Imagine Canada
- Budget 2024 presents a partial win for the sector’s advocacy on the Alternative Minimum Tax, Canadian Association of Gift Planners
- 2024 Canadian Federal Budget - How will it affect the Canadian charitable sector?, Blumbergs
- Fderal Budget 2024: Impact on charities and not-for-profits, Carters
- 2024 Federal Budget: Highlights for the Charitable and NPO sector, Miller Thomson
- Feds provide fix to new AMT regime to ease charities’ concerns, IE Investment Executive
Read More
