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Whether crowdfunding tax applies to you depends on what the money is for. If you’re running a business or selling something, what you raise can be business income. If people are just helping you through a bad year, it looks more like a gift. We couldn’t find a CRA page that rules on crowdfunding as such, so what follows are the tests the CRA does publish.
When does crowdfunding count as business income?
The CRA defines a business as an activity you carry on for profit, backed by evidence that profit was your intention. It also tells you to include all your income when you work out your tax. That’s the test to run on your campaign, and it turns on facts more than on the platform.
A few questions help. Are you selling a product or service, or pre-selling one? Do backers get something worth money in return? Is the campaign part of an activity you already run to make a living? A yes to those points towards business income. A campaign to cover a funeral bill or a house fire points the other way, though we couldn’t confirm a CRA statement that gifts to an individual are never taxable, so check before you rely on that.
What do the different kinds of campaigns look like?
| Campaign | Likely tax question |
|---|---|
| Pre-selling a product or a game | Business income, with your costs as expenses |
| Rewards for backers worth real money | Part of it looks like a sale |
| Help with a personal emergency, nothing sent back | Looks like a gift, but not confirmed here |
| Backers get shares or a stake | Different rules, not covered here |
| You donate to someone else’s campaign | No credit unless a qualified donee issues a receipt |
That last row comes from the CRA’s gift rules. A gift is a voluntary transfer with nothing coming back. If a donor gets a benefit in return, the value of that benefit comes off the amount that counts as a gift.
What does business income cost you?
Take a designer who earns $50,000 from other work and nets $6,000 from a campaign after costs. The self-employed tax calculator puts federal and Ontario income tax at $7,165.78 without the campaign and $8,331.45 with it. That’s $1,165.67 more, plus $297.50 of CPP, so about $1,463 on $6,000.
The number is a rough one. That tool leaves out EI and business expenses beyond the net figure you enter so use it to see the size, not the exact bill. Your marginal rate is the better guide, and the marginal tax rate calculator shows it.
Fees matter as well. Platforms and payment processors take a cut, and the fees on business income are normally an expense you can subtract. Keep the statements.
What if you also sell to backers?
Then think about sales tax. If the rewards are goods or services, GST/HST or provincial sales tax may apply to what backers pay you, and registration rules can kick in. We didn’t confirm the registration limit for this page. The GST/HST calculator shows how much tax sits inside a price at your province’s rate.
Mistakes and limits
The costliest mistake is leaving income off your return because the platform never sent a slip. It doesn’t matter that no slip arrived. The CRA says that if you fail to report all your income, it can charge a penalty of 10% of the unreported amount after a first omission, and 50% for knowing misrepresentation, with a minimum of $100.
Another is mixing personal and campaign money. Open a separate account and note what each dollar was for. If the CRA ever asks, that record does the talking.
Investment or equity crowdfunding is a different subject with securities law attached, and we haven’t covered it. Neither have we covered a campaign run by a company or a charity. If your campaign is large, or backers get a share of profits, talk to an accountant before you launch, because the answer there isn’t a matter of reading one page.
Where the numbers come from
The business test and the penalty come from the Canada Revenue Agency’s pages on what a business is, and the gift rules from its guide on gifts and income tax. The example uses the 2026 federal and Ontario tax data behind our calculators.
Frequently asked questions
Is money from a crowdfunding campaign taxable?
It depends. It's business income if the campaign is part of an activity you carry on for profit, and we couldn't find a CRA ruling on crowdfunding in general.
Do I need a slip to report the income?
No. You must include all your income whether or not a platform sends a slip.
Can I deduct platform fees?
Fees paid to earn business income are normally business expenses. Keep the statements.
Does a donor get a tax receipt?
Only from a qualified donee such as a registered charity. A personal campaign doesn't issue receipts.
What if I don't report it?
The CRA can charge a penalty of 10% of the unreported amount after a first omission, and 50% for knowing misrepresentation, with a minimum of $100.
- How Canadian income tax works: brackets and credits
How federal and provincial Canadian income tax stack up, what marginal and average rates mean, and how credits and deductions change your bill
Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.