Tax credit for public transit passes
By DAVID TILSON Dufferin-Caledon MP

Currently, urban vehicle exhaust can account for approximately two-thirds of smog-producing pollutants. Not surprisingly, air pollution is posing a huge problem for Canada and is a concern of many Canadian citizens. Hence, the Canadian government is taking an immense step to aid in lowering the amount of air pollution produced on a daily basis.

Beginning Jan. 1, 2007, the public transit started to offer individual Canadians a non-refundable tax credit. For weekly passes, an individual would have at least four consecutive weekly passes and each weekly pass provides unlimited public transit use for an uninterrupted period. This period is between five and seven days. A cost-per-trip electronic payment card, is used for at least 32 one-way trips during an uninterrupted period not over 31 days. Additionally, the card is issued by a public transit authority that records and provides a receipt with the cost and usage of the card.

Previously, a non-refundable public transit tax credit was claimed based on the cost of monthly public transit passes. Yet, due to recent changes made in the federal 2007 budget, there has been an expansion of the eligibility criteria for the transit tax credit. Since this is a non-refundable tax credit, not everyone who applies for this receives the money in the form of a refund. Instead, the amount claimed is multiplied by the lowest personal income tax rate for the year. The amount is then deducted from the total amount of tax owed for the particular year.

In order to support a claim for tax credit, an individual will need to keep his or her expired monthly transit passes after June 2006. In order to be sufficient for a tax credit, a transit pass must include: an indication that is a monthly (or longer duration) pass, the date of the period for which the pass is available, the name of the transit authority or organization issuing the pass, and the amount and the identity of the rider, either by name or unique identifier.

In addition, an individual is eligible to claim a tax credit for public transit passes on a 2006 income tax return for the amount an individual has paid after June 30, 2006, if he or she has proof of purchase. At a minimum, individuals should keep their expired monthly transit passes for months after June of 2006 to support their claim.

Tax credits for public transit passes are given in order to greatly support the environment and Canadians. First, the amount of gas currently being used will be reduced. This is also just one step the Canadian government is taking in order to decrease greenhouse emissions, as well as promote cleaner air in this country. The measure will hopefully greatly reduce air pollution, while promoting the use of mass transit in Canada. Additionally, this measure is intended to lessen the amount of traffic congestion that Canadians often must face, especially on their commute to and from work. Citizens will directly benefit from this because public transit will be much cheaper and more affordable.

Tax credits for public transit passes is advantageous in numerous ways. This is a measure that is being conducted through the Canada Revenue Agency and it benefits the environment. Additionally it makes the public transit much better and more affordable for Canadians. For more information on tax credit for public transit passes, please visit either www.cra.gc.ca, or visit www.transitpass.ca.