Tax credit for transit users

$104 potential in Tax Credit

Morgan Modjeski, Staff

Despite a 25-cent increase in bus fare effective Jan. 1, 2008, students can still save money by taking advantage of the benefits of bus pass tax credits, introduced last year.

Monthly bus passes were the only form of transit fare that did not increase on the first of this year; the price of all other forms of fares, including weekly passes, increased.

In July 2006, the Conservative government initiated the Transit Tax Credit, which entitles monthly bus pass purchasers to a tax credit. For the average university student in Winnipeg this is $104 a year, and $130 for regular adult monthly passes.

The idea behind the transit tax credit was to motivate more people in Canada to consider alternative forms of transportation other than cars and in turn help reduce traffic, according to a 2006 press release issued by the government.

According to the Canadian Revenue Agency (CRA), transit tax information website, the average amount of credit available is dependent on an individual’s tax rating.

Depending on the tax rating and the amount a transit rider pays over the course of a year, the minimum percentage a person can receive as a tax credit is 15.25 percent of the total cost spent on transit passes in a year, said the CRA website.

The tax credits, were only applicable to monthly transit passes when the program was first initiated, but on Jan. 1 2007, changes were made to regulations so that weekly passes purchased, can also be claimed.

According to the CRA website, “you can claim the full amount of any combination of transit passes.”

“Taxpayers are expected to provide appropriate supporting documentation for any tax credit claimed, if requested to do so by the Canada Revenue Agency,” states the CRA website.

Finance minister Jim Flaherty estimated that in 2006 that the total savings to Canadian transit users over fiscal 2006 and 2007 would be $370 million.

There is no indication yet whether the rebate program has been successful, according to Emilia Kortis, communications manager for the Manitoba branch of the CRA. “No studies have been done as far as I’m concerned,” she said.