Don’t Let Your Public Transit Credit Pass You By

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There are many tax credits and deductions that go unclaimed every year by Canadian taxpayers.  One of the more common ones is the Public Transit Tax Credit.

The Public Transit Amount offers eligible Canadians a non-refundable tax credit to help cover their public transit costs.  The federal tax credit is equal to 15{cae2521f64dcff784c511b644c6cc8c98f9594c79acdd41ba953a724385391e5} of the eligible public transit costs incurred during the year.  If you spend $120 per month on public transit passes, by claiming this credit you could save $216 on your federal income taxes.

Not all transit passes are created equal.  An eligible public transit pass must allow unlimited commutes within Canada on local buses, streetcars, subways, commuter trains, commuter buses and local ferries.  It also needs to be valid for a period of at least one month or longer.

Short term passes may also qualify for the credit.  However, each of these passes must allow for unlimited travel for a minimum of 5 consecutive days.  Enough of these passes need to be purchased to provide at least 20 days of unlimited travel in any 28 day period.

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The credit is equal to 15{cae2521f64dcff784c511b644c6cc8c98f9594c79acdd41ba953a724385391e5} of the eligible public transit costs incurred during the year.

Electronic payment cards may also qualify if they are issued by a public transit authority and if they are used to make at least 32 one-way trips during a 31-day period. Remember to register your card so you have proof of the trips taken each month.

The Public Transit credit can be claimed by you on behalf of your spouse or common-law partner, or any children under 19.

Do keep in mind that if you are reimbursed by your employer for all or part of your public transit expenses, that amount is not eligible. However, if the reimbursed amount is included in your income as a benefit, you are allowed to claim it (see Box 84 on your T4).

You do not need to submit the transit passes or receipts to support your claim when you file your tax return.  However, you need to keep copies in the event the CRA requests them down the road.   Ensure the passes include all the following:

  • the date or period for which the pass is valid;
  • the name of the transit authority/organisation issuing the pass or card;
  • the cost of each trip or pass; and
  • the rider’s name or unique identifier (the unique identifier has to be linked to the rider)

If any of the aforementioned are not available, the CRA will also require copies of the receipts, cancelled cheques or credit card statements.

There are many ways you can save on your taxes.  If you want to learn more about the Public Transit Tax Credit, or other credits and deductions that can help you and your family, contact GB Pilley & Associates Ltd., Chartered Professional Accountants at 604 926 3522.

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2016-11-23T14:15:43+00:00