Can an estate make a donation to charity in Ontario and get a tax credit?

Yes. Under Canadian federal tax rules, donations made by an estate to a registered charity are eligible for a charitable tax credit that can be applied on the estate's T3 trust return or carried back to the deceased's final T1 returns. This is an area where the tax rules were updated to give estates more flexibility in using donation credits.

A donation made in a will (a "testamentary gift") or by the estate during administration can qualify for the donation tax credit. The estate has flexibility to allocate the credit across several tax years, including the deceased's year-of-death return and the year before death. This "stacking" ability can meaningfully reduce the estate's total tax bill.

The donation must be to a registered Canadian charity (or other qualified donee) and must be accompanied by a valid donation receipt. Life insurance policies can also name a charity as beneficiary, with the insurance proceeds qualifying for a donation credit. Executors and estate accountants should work together to maximize the tax benefit of any intended charitable gifts.