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Tax Credit for Public Transit Passes
A non-refundable tax credit to cover the cost of public transit passes is now offered by the Government of Canada. If you have a public transit pass, learn how you can take advantage of this new tax credit available as of July 1, 2006:
- What is the Tax Credit for Public Transit Passes?
- How do I claim the Tax Credit for Public Transit Passes?
- What will I need to support my claim for the tax credit?
- How much of a tax credit can I claim?
- I use more than one method of public transit to commute. Can I claim more than one type of pass?
- Can I claim the tax credit on behalf of my family?
- In my area, transit passes for July are on sale starting mid-June. If I bought my July pass in June, does it mean that I cannot claim it?
- Where can I get more information about this transit pass tax credit?
1. What is the Tax Credit for Public Transit Passes?
The Tax Credit for Public Transit Passes is a non-refundable tax credit for the cost of buying a monthly (or longer duration) pass for commuting on buses, streetcars, subways, commuter trains and local ferries.
2. How do I claim the Tax Credit for Public Transit Passes?
You will be able to claim the Tax Credit for Public Transit Passes on your 2006 income tax return for the amounts you have paid for travel that occurs after June 30, 2006.
3. What will I need to support my claim for the tax credit?
At a minimum, you will need to keep your expired monthly transit passes for months after June 2006 to support your tax credit claim.
If your transit pass displays all of the following information, the pass itself will be sufficient to support a claim for the tax credit:
- an indication that it is a monthly (or longer duration) pass;
- the date or period for which the pass is valid;
- the name of the transit authority or organization issuing the pass;
- the amount paid for the pass; and,
- the identity of the rider.
If the transit pass does not have all of this information, you will also need to keep receipts, cancelled cheques or credit card statements, along with your pass(es), to support your claim.
You will not need to submit any documentation when you file your return, but you must keep it in case the Canada Revenue Agency (CRA) asks for it in verifying your claim.
4. How much of a tax credit can I claim?
You can claim the full amount paid for a public transit pass, or for the cost of passes for multiple transit systems (see question 5 below).
The tax credit is a non-refundable tax credit, which means that the amount you claim is multiplied by the lowest personal income tax rate for the year (15.25% in 2006) and is then deducted from your tax otherwise payable.
5. I use more than one method of public transit to commute. Can I claim more than one type of pass?
Yes, you can claim the full amount of any combination of transit passes.
6. Can I claim the income tax credit on behalf of my family?
Yes, you can claim the Tax Credit for Public Transit Passes on behalf of your spouse, common law partner, and your children under the age of 19, to the extent that these amounts have not already been claimed.
7. In my area, transit passes for July are on sale starting mid-June. If I bought my July pass in June, does it mean that I cannot claim it?
No, as long as you keep your receipt and your transit pass, you can claim amounts you have paid for travel that occurs after June 30, 2006, as would be the case of your July pass, no matter when you purchased it.
8. Where can I get more information about this transit pass tax credit?
Additional information on how to claim the Tax Credit for Public Transit Passes will be posted soon on the Canada Revenue Agency website at www.cra.gc.ca.