New federal tax rules add a top bracket of 33% for taxpayers earning more than $200,000. The government has tweaked the donation tax credit rules to accommodate this change, explains a blog post by Arthur Drache of Drache Aptowitzer LLP.
“For many years, after a low 15% credit for the first $200 of donations, all donations got a credit of 29%, equal to the top federal marginal rate,” notes Drache. The new rules give people in the new top bracket a 33% donation credit to reflect the fact they’re paying more tax, while for everyone else the credit will stay at 29%.
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