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Red Deer Transit users are advised to keep their monthly passes if they plan to claim a new tax credit for public transit use on their 2006 income tax return. The Transit pass credit was announced as part of the May 2006 federal budget. The tax credit is available for all Transit passes used on or after July 1, 2006, even if the pass was purchased before that date.
Red Deer Transit’s monthly passes already contain all of the information required by the Canada Revenue Agency in order to claim the tax credit:
- an indication that it is a monthly pass
- date and duration of time that the pass is valid
- the name of the issuing Transit system
- price paid for the pass
- identification of the passholder
This means that Red Deer Transit customers do not have to save their receipts, or retain credit card or bank statements to support their claim. All they need to do is save their monthly passes.
In addition to claiming his or her own cost of Transit passes, an individual can make a claim on behalf of a spouse of common-law partner, and the individual’s children under the age of 19, providing the spouse, partner or child has not already claimed the credit.
Questions and Answers: Tax Credit for Public Transit Passes
What is the tax credit for public Transit passes?
The tax credit is a non-refundable tax credit for the cost of buying a monthly pass for commuting on buses, streetcars, subways, commuter trains and ferries.
How do I claim the tax credit for Red Deer Transit passes?
You will be able to claim the tax credit on your 2006 income tax return for the amounts you have paid for travel that occurs after June 30, 2006.
What will I need to support my claim?
You will need to keep your expired monthly Transit passes for months after June 2006 to support your claim. Red Deer Transit passes contain all the information required by the Canada Revenue Agency to support a claim for the tax credit. This means you do not have to save receipts or other supporting documentation along with your Transit passes.
You will not need to submit any documentation when you file your return, but you must keep it in case the Canada Revenue Agency asks for it in verifying your claim.
How much can I claim?
You can claim the full amount paid for your Red Deer Transit pass. The tax credit is a non-refundable tax credit, which means that the amount you claim is multiplied by the lowest personal income tax rate for the year (15.25 per cent in 2006) and is then deducted from your tax otherwise payable.
Can I claim the credit on behalf of my family?
Yes, you can claim the tax credit for Red Deer Transit passes on behalf of your spouse, common-law partner, and your children, providing the spouse, partner or child has not already claimed the credit.
In Red Deer, July Transit passes go on sale in June. If I bought my July pass in June, does it mean that I can't claim it?
No, as long as you keep your pass, you can claim amounts you have paid for travel that occurs after June 30, 2006. This is the case for your July pass, no matter when you purchased it.
Where can I get more information about this tax credit?
Additional information on how to claim the tax credit for public transit passes will be posted soon on the Canada Revenue Agency Web site.
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