Running a charity is about making a difference and not getting bogged down in paperwork. But, like any organization, you need to know some tax and financial rules.

Let's break down some key points:

‍

1. Charities That Are Corporations

The Good News: If your charity is set up as a corporation, you don't have to file the usual corporate income tax return (called a T2) while you're a registered charity.

The Catch: If you lose your charitable status, you must start filing those T2 returns again.

‍

2. Internal Trusts? No Extra Paperwork!

‍What are internal trusts? Sometimes, charities manage money or assets within their own organization through what's called a trust.

The Good News: You don't need to file a separate trust income tax return (T3) for these internal trusts.

Why? You already report all your financial information, including anything in these internal trusts, on your primary annual charity return, the T3010.

‍

3. Changing Your Financial Year

If you change your financial year (fiscal year-end), you'll have a short "transition period" between your old year-end and your new one. You'll need to file a separate T3010 return for this short period.

‍

4. Saving Up Funds?

Here's How to Report It

If you're saving money for a specific project, You'll need to report how much you saved during the year and any income earned on a specific line of your T3010 (line 5500).If you spent some of those saved funds, You'll report that on another line (line 5510).

‍

5. Accumulating Funds: What's Changed?

Old Rules: Before January 2023, you could ask the CRA for permission to save up funds for a long-term project. If they approve, you could do it for a set period.

Important: If you got approval before January 2023, it is still valid until it expires.

New Rules: As of January 1, 2023, the CRA no longer reviews or grants these requests. You can no longer apply to accumulate funds.

The CRA wants to make it as easy as possible for charities to focus on their important work. By understanding these rules, you can keep your charity compliant and avoid unnecessary headaches. Always check the official CRA website or ask an expert for guidance.

‍