How do donation tax receipts work when I have no taxable income?

Question

I currently refurbish computers as a side volunteering thing, and all refurbished computers go to charity. I will receive tax receipts for these donations. The thing is though, I am still <18 and making very low income on a part time job. My total annual income will be roughly $5K Canadian. I'm pretty sure this is under the income tax bracket, which makes me ineligible for income tax.

Does this nullify my tax receipts? I assume they work as a subtraction against your income tax, though I don't pay income tax so I'm confused...

Answer 1

You've correctly understood the way charitable donations work. They are non-refundable tax credits, which means they reduce your income tax bill if you pay any, but can't reduce it below zero. If you earn less than $11,138 (in 2014) you will pay no income tax.

However the good news is that charitable donations claims can be deferred for up to five years. This means that your best strategy is to hang on to those tax receipts, and assuming you start earning taxable income in the next five years, claim them then.

EDIT: I would expect that making the donation through one of your parents would work. Essentially you would be giving the computers to your parents, and they would give them to the charity. You would have to make sure the receipts were issued in your parents name. You would also have to make sure that the amounts involved were small enough that your parents didn't pay tax on the gift to them, but in the amounts you seem to be talking about that shouldn't be a problem.