US-Canada Income Tax Treaty for Charity

In 1980 the U.S. and Canada have entered into a mutual agreement. The agreement was named The US-Canada Income Tax convention.

Under the terms of the United States-Canada Income Tax Treaty agreement, recognized religious, scientific, literary, educational, or charitable organizations that are organized under the laws of either the U.S. or Canada will automatically receive recognition of exemption without application in the other country.

U.S. organizations must be recognized as exempt under section 501(c)(3) of the Code in order to qualify for this treatment. Similarly, Revenue Canada must recognize Canadian organizations as Canadian registered charities. Recognized charitable organizations resident in one country will be eligible to receive deductible charitable contributions from residents of the other country.

The treaty provides limited tax benefit to individuals residing in one country with income in the other country.

To read the full treaty click on the link to the Canadian Government website and here for the US Government website

 

 

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