Here’s a quick money saving tip for those who regularly use public transit in Canada. Starting around 2006, a non-refundable tax credit was introduced on public transit passes. The rate varies year to year, but has typically been around 15% of the transit pass purchase price. The program doesn’t apply to single fare passes, but rather weekly or monthly passes.3
As an example of the potential savings, I’ll use a 2-zone Translink monthly pass. The current cost for a monthly 2-Zone Translink pass is $110.00.1. If you use public transit all year round, you’ll have shelled out 12 x $110.00 = $1320.00 on public transit. Assuming a non-refundable tax credit of 15%, you’d pay $1320.00 x 15% = $198.00 less in income tax come tax-time the next year. This is not bad, especially when you consider the convenience of having a transit pass in your wallet or purse & not having to fumble for fare. If you are a disciplined credit card user (that is, you pay off your credit card balance in full each month), you can extend the benefit by collecting loyalty rewards associated with various credit cards, such as cash-back or Air Miles.
To find out more about this non-refundable tax credit, please visit http://transitpass.ca. As always, the latest Canadian tax credits, policies, regulations, etc., are posted on the Canada Revenue Agency website.2
References
- Monthly Pass http://www.translink.ca/en/Fares-and-Passes/Monthly-Pass.aspx Accessed, May 16, 2010.
- Canada Revenue Agency main website http://www.cra-arc.gc.ca
- As always, it’s best to check the latest literature from Canada Revenue Agency or work with high-quality accountants with a deep knowledge of the latest Canadian tax laws and policies.
