Whether you regularly use public transit because you have to, or because you choose to, deducting the cost of your public transit passes is a nice credit to have in your arsenal come tax time. Unfortunately, the Public Transit Tax Credit was recently eliminated for services after June 2017, so the 2016 tax year is your last chance to claim these expenses.
What Kinds of Passes Are Deductible?
You’re probably wondering if your pass is eligible. First, to be eligible for the credit, your public transit pass must be valid for at least one month, for travel on public transit within Canada.
The pass must allow you unlimited travel on:
- Local and commuter buses
- Commuter trains
- Local ferries
Short-term passes may also be eligible but only if they cover unlimited travel for at least five consecutive days, and enough are purchased to cover 20 days of travel within a 28-day period. For example, if you buy four consecutive, unlimited weekly passes, you would be entitled to the deduction. Not all bad news then!
Electronic payment cards like Presto may also be eligible if you use them to make at least 32 one-way trips during an uninterrupted period of at least 31 days. To claim an electronic payment card, you’ll need a receipt that shows both your cost and your usage.
Payments made directly to a university, such as the U-Pass program, are also eligible.
Finally, because the credit will be eliminated as of June 2017, your passes must have been used between January 1, 2017, and June 30, 2017. That means passes used after June 30th are not deductible on your tax return.
Who Can Claim the Public Transit Tax Credit?
You can claim the Public Transit Tax Credit for eligible passes purchased for yourself or your spouse/partner. You can also claim the credit for passes purchased for your children if they were under 19 years of age on December 31 of the year.
Can I Deduct Passes My Employer Pays for Me?
If your employer pays for your public transit pass, the cost of the pass is actually included as a taxable benefit on your T4 slip.
To counterbalance this, you can claim the Public Transit Tax Credit for the amounts paid by your employer. The amount you can claim is found in box 84 of your T4 slip.