Dear [Name],
As of January 2024, significant changes made by the Government of Canada to the Alternative Minimum Tax (AMT) will come into effect. The AMT is designed to ensure that high-income individuals who take advantage of various tax credits pay a minimum level of tax.
The changes will increase the federal tax rate from 15 per cent to 20.5 per cent as well as expand what is subject to the AMT. Additionally, capital gains will now have a 100 per cent inclusion rate for the AMT compared to 80 per cent previously.
Under the new rules, charitable donations made in a tax year will no longer provide the same relief as in other years when calculating the AMT.
Individuals and trusts with taxable income greater than $173,000 should take heed as to how this impacts their tax planning strategies.
For these reasons, if you are thinking about making a donation, fulfilling a pledge, or contributing to Donor Advised Funds, it may be preferrable to do so sooner rather than later.
If you believe that the AMT may affect you and your tax planning, please consult with your tax advisor.
Sincerely,
Paul Chesser, BA 94, GrDip 97
Vice-President, Advancement
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