Since the advent of personal tax credits, individuals have been entitled to a Federal credit at the lowest personal tax rate (presently 15%) for the first $200 of donations claimed in a year and at the highest Federal rate (historically 29%) on any excess.
The Draft Legislation released on December 7, 2015 (see VTN 413(1)) proposes to increase the highest personal tax rate to 33% and also to change the credit for charitable donations in excess of $200, both effective in 2016. The credit for donations in excess of $200 will be increased to 33%, but only to the extent the individual has taxable income subject to the new 33% personal tax rate (income over $200,000 for 2016).
Only gifts made after 2015 will qualify for the enhanced credit, so donations made in 2015 or prior years and carried forward will not generate this enhanced credit.
For further information see VTN Monthly Tax Update Seminar, Issue No. 413