Donate Personally or Through Your Corporation? (2026)

Reviewed by Bader A. Chowdry, CPA, CA, LPA on November 2, 2026

For most Ontario owner-managers, the answer depends on where the money is sitting and what you would otherwise do with it. A personal gift earns a tax credit worth up to roughly 44 cents per dollar above $200 for a top-bracket donor (33% federal plus 11.16% Ontario). A corporate gift earns a deduction worth only the corporation’s tax rate, about 11.7% on small business income for a December 31, 2026 year end or 26.5% on general-rate income. The personal credit looks far richer, but personal dollars have already been taxed once on the way out of the corporation, while corporate dollars have not. If you are giving appreciated listed shares, the corporation gains an extra edge through the capital dividend account. Here is how each piece works for 2026.

How much is a personal donation worth in Ontario in 2026?

Section 118.1(3) of the Income Tax Act sets the federal credit in three layers. The first $200 of gifts earns the “appropriate percentage,” which is the lowest federal bracket rate; for 2026 that is 14%, after Bill C-4 lowered the first bracket from 15% (it was 14.5% for 2025, which is why the CRA’s current donations page, still labelled for the 2025 tax year, shows 14.5%). Gifts above $200 earn 29%, except that the portion matched by taxable income above the top bracket threshold, $258,482 for 2026, earns 33%.

Ontario adds 5.05% on the first $200 and 11.16% above $200. Because the Ontario surtax is calculated on Ontario tax after non-refundable credits, a donor who pays surtax can see the Ontario side of the credit go further than 11.16%. We have left that out of the figures below to keep them conservative.

The credit is non-refundable, so it only helps if you have tax to reduce. You can generally claim gifts up to 75% of your net income for the year, and any amount you do not use can be carried forward for up to five years.

How does a corporate donation work?

A corporation does not get a credit. It deducts eligible gifts in computing taxable income under section 110.1 of the Income Tax Act, reported on Schedule 2 of the T2 return. The rules mirror the personal ones in several ways: the deduction is generally limited to 75% of the corporation’s net income, it cannot be used to create or increase a loss, and unused gifts carry forward for five years.

The value of the deduction is the corporate tax rate on the income it shelters. For an Ontario Canadian-controlled private corporation in 2026:

• Small business income, December 31, 2026 year end: about 11.70% (9% federal plus Ontario prorated by days between 3.2% before July 1, 2026 and 2.2% after).
• Small business income, taxation year falling entirely after July 1, 2026: 11.2%.
• General-rate income above the $500,000 business limit: 26.5%.

The Ontario cut to 2.2% is enacted law (Bill 97, which received Royal Assent as Statutes of Ontario 2026, chapter 2). Our corporate tax calculator uses the same rates.

Personal or corporate: what does a $10,000 gift save?

Here is the immediate tax relief on a $10,000 cash gift made before December 31, 2026, assuming the individual’s 2026 taxable income exceeds $258,482 by at least $9,800 and the corporation has enough net income to absorb the deduction.

Who gives	How the relief is calculated	Tax relief on $10,000	Relief per dollar
You personally (top bracket, Ontario)	Federal: 14% x $200 + 33% x $9,800 = $3,262.00 Ontario: 5.05% x $200 + 11.16% x $9,800 = $1,103.78	$4,365.78 (before any Ontario surtax effect)	43.7%
Corporation, small business income, Dec 31, 2026 year end	$10,000 deduction x ~11.70%	about $1,170	~11.7%
Corporation, small business income, year entirely after July 1, 2026	$10,000 deduction x 11.2%	$1,120	11.2%
Corporation, general-rate income	$10,000 deduction x 26.5%	$2,650	26.5%

Do not stop at the right-hand column. To give $10,000 personally, an owner-manager usually has to take the money out of the corporation first, as salary or dividends, and pay personal tax on it. The corporate gift skips that extraction step, but it also leaves the corporation with less to pay out later. Once you account for the tax on getting the money out, the two routes end up far closer than 43.7% versus 11.7% suggests, and the result turns on whether the cash would otherwise stay invested in the corporation for years. That is a calculation to run on your own numbers; our salary vs dividend guide for 2026 explains the extraction side.

Some practical tie-breakers: if you already plan a large personal dividend this year, giving personally uses income you are paying out anyway. If the corporation has surplus cash it will not need and you do not want more personal income, the corporate gift is simpler. And if the gift is appreciated securities held in the corporation, the next two sections usually settle it.

Why donate listed securities instead of cash?

When an individual or a corporation donates shares listed on a designated stock exchange, mutual fund units, segregated fund interests or certain prescribed debt obligations to a qualified donee, the capital gain on the gift has a zero inclusion rate. The normal inclusion rate is 50% for 2026 (the proposed increase to two-thirds was cancelled and never enacted). The gift is still receipted at fair market value.

Compare two ways for a corporation to give $10,000 of shares with a $4,000 adjusted cost base:

Approach	Taxable capital gain	Donation deduction	Capital dividend account addition
Sell the shares, donate $10,000 cash	$3,000 (50% of $6,000)	$10,000	$3,000
Donate the shares directly	$0 (zero inclusion)	$10,000	$6,000

Selling first means paying tax on half the gain; donating in kind removes it. Individuals get the same zero inclusion through Form T1170. Before you donate a losing position, sell it instead, claim the loss, and donate cash; our tax-loss selling guide covers the timing. The gift must actually transfer to the charity’s brokerage account by December 31, so start the paperwork early in December.

How does a donated share gift affect the capital dividend account?

A private corporation’s capital dividend account (CDA) tracks the non-taxable portion of its capital gains. The CRA’s Income Tax Folio S3-F2-C1 notes that when listed securities are gifted to a qualified donee, the taxable portion of the gain is zero, so the entire gain is non-taxable and flows into the CDA. The corporation can then elect to pay that amount to shareholders as a capital dividend, which shareholders receive without personal tax.

In the example above, donating the shares adds $6,000 to the CDA instead of $3,000. Combined with the donation deduction, this is why giving appreciated public shares through a corporation or holding company is often the most efficient route for owner-managers who hold investments corporately. The capital dividend requires a prescribed election (Form T2054) filed on time, and the CDA balance should be confirmed before any payment; an excessive election triggers a penalty tax. Our capital gains guide for 2026 has more on the 50% inclusion rate and the CDA.

What counts as a 2026 donation, and what receipt do you need?

• Individuals: the gift must be made in the 2026 calendar year, by December 31, 2026.
• Corporations: the gift counts in the taxation year in which it is made; for a December 31 year end that is the same date.
• Mailed cheques: the CRA treats the postmark date as the date of the gift. Online and in-person gifts are dated when the charity receives them.
• Receipts: you need an official donation receipt from a qualified donee. The CRA suggests charities issue receipts by February 28 of the following year. Make sure the receipt names the donor who actually made the gift: a corporate cheque needs a receipt in the corporation’s name.
• Advantages: if you receive something back (gala tickets, for example), the eligible amount is reduced by the value of that advantage.

Frequently asked questions

Is a donation worth more personally or through my corporation?

Per dollar, the personal credit is larger: about 43.7% for a top-bracket Ontario donor on gifts above $200, versus a corporate deduction worth about 11.7% on small business income or 26.5% on general-rate income. But personal dollars are usually already taxed on the way out of the corporation, so the overall answer depends on your extraction plans.

What is the federal donation tax credit rate for 2026?

For 2026 the federal credit is 14% on the first $200 of gifts, 29% on gifts above $200, and 33% on the portion of gifts above $200 matched by taxable income over $258,482. The 14% rate follows the lowest federal bracket, which Bill C-4 set at 14% for 2026.

How much can a corporation deduct for charitable donations?

A corporation can generally deduct eligible gifts up to 75% of its net income for the year. Donations cannot create or increase a loss, and unused amounts can be carried forward for five years.

Why do donated shares increase the capital dividend account?

Gifts of listed securities to a qualified donee have a zero capital gains inclusion rate, so the whole gain is non-taxable. A private corporation adds the non-taxable portion of its capital gains to its capital dividend account, so the full gain can later be paid out as a capital dividend.

Does a cheque mailed on December 31 count for 2026?

Yes. The CRA treats the postmark date as the date of the gift for mailed donations, so a cheque postmarked on or before December 31, 2026 counts for 2026. Online gifts are dated when the charity receives them.

Official sources

• CRA: How much you can claim, donations and gifts (rates, 75% limit, 5-year carryforward)
• Income Tax Act, section 118.1: Charitable gifts (Justice Laws)
• Income Tax Act, section 110.1: Deduction for gifts by corporations (Justice Laws)
• CRA: Individual tax rates and brackets for 2026
• CRA: T4012 T2 Corporation Income Tax Guide, zero inclusion rate on gifts of listed securities
• CRA: T2 Schedule 2, Charitable Donations and Gifts
• CRA: Income Tax Folio S3-F2-C1, Capital Dividends
• CRA: What you need to know to issue an official donation receipt (date of gift, postmark)
• Ontario: Corporate income tax rates

General information only, not tax or legal advice. Figures are current as of November 2, 2026 and can change; confirm your situation with a qualified advisor before acting. Insight Accounting CPA Professional Corporation, Mississauga, Ontario.