Cross-Border Charitable Giving: Strategies for Donors Who File in Both Canada and the US

The best cross-border giving plan usually starts with giving appreciated listed shares instead of cash, and giving them to an organization that counts on both sides of the border. Canada pays a federal credit of 29% to 33% on most of a gift plus a provincial credit, and it doesn’t care whether you itemize. The US gives a deduction worth your marginal rate, and from 2026 only the part above 0.5% of income counts, with a haircut for top-bracket filers. Anyone filing in both countries also has to watch the foreign tax credit, because a credit in one country shrinks the tax the other will credit.

Is a Canadian donation credit worth more than a US deduction?

Usually, for the same dollar. Canada’s federal credit is 14% on the first $200 and 29% on the rest, rising to 33% on the part of the gift matched by income taxed in the top bracket, before any provincial credit, and you get it whether or not you itemize. A US deduction is worth your marginal rate if your itemized deductions beat the standard deduction ($16,100 single, $32,200 joint for 2026); from 2026 a non-itemizer gets at most $1,000 ($2,000 joint) for cash gifts to US public charities, and an itemizer counts only the part above 0.5% of adjusted gross income.

	Canada (individual)	US (individual)
Form of relief	Non-refundable credit against tax	Itemized deduction from income, or a small non-itemizer deduction
Federal rate	14% on the first $200; 29% above; 33% on the slice matched by income over the top-bracket threshold ($253,414 in the current ITA text)	Your marginal rate, 10% to 37%
Floor	None	From 2026, only contributions above 0.5% of AGI count
Annual ceiling	75% of net income (100% in the year of death and the year before)	60% of AGI for cash to public charities; 30% for appreciated property
Carryforward	Five years	Five years
Hurdle	None	Itemized deductions must beat the standard deduction: $16,100 / $32,200 / $24,150 for 2026
Top-bracket haircut	None	From 2026, itemized deductions cut by 2/37 of the lesser of the deductions or income taxed at 37%
Listed shares in kind	Taxable capital gain is zero	Held over a year: no gain recognized, fair market value deduction

• The credit formula is ITA 118.1(3): the “appropriate percentage” times the first $200, the “highest individual percentage” times the part of the gift matched by income above the top threshold, and 29% on the rest. Under ITA 248(1) those two percentages are the lowest and highest rates in ITA 117(2), 14% and 33% for taxation years after 2024.
• The 75% ceiling is the “total gifts” formula in ITA 118.1(1), which starts at 0.75 times income and rises to 100% of income where “the individual dies in the year or in the following taxation year.” Unused gifts can be claimed in “any of the five preceding taxation years” by the reverse rule in the same definition, which the CRA’s P113 describes as carrying forward “for any of the next 5 years.”
• The US side is IRC 170(b)(1)(G) for the 60% limit, 170(b)(1)(C) for the 30% limit on capital gain property, 170(b)(1)(I) for the floor and IRC 68 for the top-bracket reduction. The standard deduction figures are from the IRS’s 2026 inflation adjustments.

What changed for US donors in 2026?

All of it applies to tax years beginning after December 31, 2025, under P.L. 119-21. The 60% of AGI limit on cash gifts to public charities lost its 2025 expiry and is now permanent. Itemized charitable deductions are allowed only above a floor of 0.5% of the contribution base. Non-itemizers can deduct up to $1,000 ($2,000 on a joint return) of cash gifts to public charities. And filers with income in the 37% bracket lose 2/37 of their itemized deductions on that income.

• IRC 170(b)(1)(I): “Any charitable contribution otherwise allowable (without regard to this subparagraph) as a deduction under this section shall be allowed only to the extent that the aggregate of such contributions exceeds 0.5 percent of the taxpayer’s contribution base for the taxable year.”
• IRC 170(p): if the individual “does not elect to itemize deductions,” the deduction is the cash-gift deduction “not in excess of 1,000 ($2,000 in the case of a joint return).” The amendment note shows P.L. 119-21 substituted these figures for the old “$300 ($600” and struck the words “beginning in 2021.”
• IRC 170(b)(1)(G): the 60% rule now reads “For taxable years beginning after December 31, 2017”; the pre-amendment text, quoted in the notes, ended “and before January 1, 2026.”
• IRC 68: itemized deductions “shall be reduced by 2/37 of the lesser of” the itemized deductions or the taxable income above “the dollar amount at which the 37 percent rate bracket under section 1 begins.”
• Corporations: IRC 170(b)(2)(A) now allows a deduction only for contributions that “exceed 1 percent of the taxpayer’s taxable income” and do “not exceed 10 percent.”
• For 2025 returns: no floor, no haircut, the 60% limit under the old wording, and a standard deduction of $15,750 single, $31,500 joint and $23,625 head of household.

The wider set of 2025 and 2026 changes for cross-border filers is in the One Big Beautiful Bill Act and cross-border tax.

Should you give appreciated shares instead of cash?

Yes, on both sides of the border, if the shares have gone up and you’ve held them long enough. In Canada a gift of listed shares to a qualified donee has a taxable capital gain of zero under ITA 38(a.1), and you still get a receipt for the full value. In the US, long-term appreciated shares given to a public charity are deducted at fair market value with no gain recognized, and publicly traded securities are exempt from the appraisal requirement, though the deduction is capped at 30% of AGI instead of 60%.

• ITA 38(a.1): the taxable capital gain “is equal to zero if” the disposition “is the making of a gift to a qualified donee of a share, debt obligation or right listed on a designated stock exchange, a share of the capital stock of a mutual fund corporation, a unit of a mutual fund trust” and similar securities.
• The 50% inclusion rate is ITA 38(a) (“½ of the taxpayer’s capital gain”); the two-thirds rate proposed in 2024 was never enacted and the Act reads one-half at every level of gain. Canada also lifts the 75% ceiling by 25% of the taxable gain on gifted property, under the “total gifts” formula in ITA 118.1(1).
• IRC 170(e)(1) reduces a property gift by the gain that “would have been long-term capital gain if the property contributed had been sold” only in the listed cases (short-term property, tangible property put to an unrelated use, most gifts to private foundations); a long-term gift of listed shares to a public charity is outside them. IRC 170(b)(1)(C) caps such gifts at “30 percent of the taxpayer’s contribution base,” with the excess carried “in each of the 5 succeeding taxable years.” IRC 170(f)(11)(A) exempts “publicly traded securities” from the appraisal rules.
• Capital gains on the two sides are compared in capital gains tax, Canada vs US.

Which charities count on both sides of the border?

Canadian registered charities with a US-organized “friends of” affiliate that holds its own 501(c)(3) status, and US charities with a Canadian-registered “friends of” affiliate; a Canadian-organized charity’s own 501(c)(3) letter doesn’t get a US donor past IRC 170(c)(2)(A). US universities that have registered with the CRA as qualified donees, which any Canadian resident can give to without US-source income. And any college or university you or a family member attended, which the treaty exempts from the source-income cap in both directions.

• ITA 149.1(1) lists as a qualified donee “a university outside Canada, the student body of which ordinarily includes students from Canada, that has applied for registration.” P113 describes the same list as “universities outside Canada that ordinarily include students from Canada, that are registered with the CRA.”
• Article XXI(6) and (7) of the treaty carve out gifts “to a college or university at which the resident or a member of the resident’s family is or was enrolled” from the source-income cap.
• For everything else the cap applies, and the mechanics of the cap, what counts as source income, and the paperwork are in cross-border charitable donations.
• A US donor-advised fund is a US organization, so a Canadian resident’s contribution to one is a US gift with the cap attached, if the sponsor passes the treaty’s charity test. A gift to a Canadian foundation’s donor-advised fund is a Canadian gift. Where the sponsoring organization exists on both sides, give to the one in the country where the credit is worth more to you.

Confirm the status before the money moves. The charity should be able to show its CRA registration number or its IRS determination letter, and an organization that is “generally exempt” in one country isn’t automatically registered in the other.

Does a donation in one country change your foreign tax credit in the other?

Yes, for anyone who files in both. The US foreign tax credit is a credit for Canadian tax actually paid, so a donation credit that cuts your Canadian bill by $5,000 also cuts the Canadian tax you can claim on Form 1116 by up to $5,000. Whether the gift still leaves you ahead depends on whether you already have excess foreign tax credits, so the two benefits don’t simply add together.

• The Form 1116 credit is for “certain foreign taxes” you “paid or accrued,” so less Canadian tax paid means less credit. The mechanics and the limitation are in Form 1116 and Canadian tax changes.
• The same thing happens in reverse for a Canadian resident with US-source income who deducts a gift on a US return: the lower US tax reduces the foreign tax credit on the Canadian return. How US income and tax land on the T1 is in reporting US income on a Canadian return.

How should a corporation or foundation give across the border?

A Canadian corporation deducts gifts to qualified donees up to 75% of its income, with a five-year carryforward, and from 2026 a US corporation deducts only the part of its contributions above 1% of taxable income and up to 10%. In our reading the treaty caps apply to corporate cross-border gifts the same way they apply to individuals; neither the CRA nor the IRS has said so in print. A US private foundation granting to a Canadian charity either treats the charity as the equivalent of a US public charity under IRC 4945(d)(4)(A) or exercises expenditure responsibility under IRC 4945(h), and it still has to meet the 5% minimum investment return under IRC 4942.

• ITA 110.1(1)(a): a corporation deducts the eligible amount of gifts “made by the corporation in the year or in any of the five preceding taxation years to a qualified donee, not exceeding the lesser of the corporation’s income for the year and the amount determined by the formula 0.75A + 0.25(B + C + D).”
• IRC 170(b)(2)(A): corporate contributions are allowed “only to the extent that the aggregate of such contributions exceeds 1 percent of the taxpayer’s taxable income for the taxable year, and does not exceed 10 percent of the taxpayer’s taxable income for the taxable year.”
• IRC 4945(h): “expenditure responsibility” means “the private foundation is responsible to exert all reasonable efforts and to establish adequate procedures” over the grant. IRC 4942(e)(1) sets the minimum investment return at “5 percent” of the excess of the foundation’s assets over its related debt.
• Article XXI(6) speaks of a “citizen or resident of the United States” and XXI(7) of a “resident of Canada,” and a corporation resident in either country is a resident for treaty purposes, so a corporate gift across the border is capped by the same source-income test.

What should I do next?

List the shares you’ve held more than a year with the biggest gains, and give those before you give cash. Check whether the charity has a registered affiliate on your side of the border, or whether it’s a school someone in the family attended. If you file in both countries, have both returns run with and without the gift, because the foreign tax credit decides which side the gift should land on. If you’re a US filer, add up your itemized deductions first, since from 2026 the first 0.5% of AGI in gifts doesn’t count and the standard deduction has to be beaten.

• Cross-border charitable donations: can you claim a gift to the other country’s charity?, the treaty mechanics, the cap and the paperwork
• Year-end tax planning for cross-border filers, where donation timing fits with everything else
• Standard deduction or itemizing for cross-border filers, the hurdle a US deduction has to clear
• Form 1116 and the foreign tax credit, the interaction that decides which side to give on
• Canada vs US tax rates, the marginal rates behind the value of a deduction

Related guides:

• Business Charitable Contributions: Deduction Rules for LLCs, S-Corps, and C-Corps

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.