Ontario Seniors' Public Transit Tax Credit

The Ontario seniors' public transit tax credit (OSPTTC), which is now law, provides eligible seniors in Ontario with a tax credit of 15 percent on eligible public transit costs up to a maximum amount ($1,500 for 2017 and $3,000 thereafter) for the taxation year. The maximum credit is $225 for 2017 and $450 thereafter. For 2017, only transit costs for the July-December period qualify. The credit is refundable, which is quite significant for seniors, since many are not taxpaying. An eligible senior may claim the OSPTTC only on his or her own tax return (Ontario Taxation Act, 2007 [OTA], section 103.0.1(3), and CRA documentation). The OSPTTC seems to be a partial replacement for the federal non-refundable public transit tax credit, which was eliminated effective June 30, 2017 as part of the 2017 federal budget.

Taxpayers who are 65 years of age at the beginning of the year and are residents of Ontario at the end of the year are eligible to claim the OSPTTC. Eligible expenses relate to the public transit services operated by the provincial or a municipal government in Ontario, or by a private business operating the service on the province's or municipality's behalf, including such public transit services as OC Transpo, the Toronto Transit Commission, and the GO Network. Expenses incurred on services offered by other operators, such as Greyhound and Megabus inter-city bus services, are not eligible. In addition, to qualify for the OSPTTC, the transit services must be offered to the general public by means of bus, subway, train, or tram. Trips originating from within the province to a destination outside Ontario, such as Windsor-Detroit or Ottawa-Gatineau, including one-way or round trips, qualify for the credit. Eligible services include specialized transit services for people with disabilities (OTA section 103.0.1(1)); such transit services may also qualify for the medical tax credit if conditions such as the minimum 40- or 80-km distance are met (Income Tax Act, paragraphs 118.2(2)(g) and (h)).

Cash fares for non-specialized transit services are not eligible for the OSPTTC. Qualifying payment methods include various transit passes, fares paid using an electronic payment card that provides a personalized usage report, and single-ride tickets or tokens, supported by an itemized receipt. In most cases, only discounted senior fares are eligible for the credit. However, in cases where the transit service does not offer a senior fare for the specific type of service, the regular fare is eligible. For instance, if the transit service offers discounted senior monthly passes, but not single-ride tickets, an eligible senior may claim the OSPTTC on the single-ride ticket, but not on a regular adult monthly pass (OTA section 103.0.1(1)).

A receipt is not required if the fares were paid for by an electronic payment card (such as Presto) that provides a usage report that includes the name of the taxpayer. If the report is not available, the receipt is necessary to claim the credit. The receipt must show the name of the transit operator and the date and amount of the value added to the card. Moreover, if the receipt does not show the taxpayer's name, bank or credit card statements may be used as proof of payment in addition to the receipt. The requirements are similar for single-ride tickets and tokens. In the case of transit passes, the receipt is not required and the pass serves as proof of payment (OTA section 103.0.1(2)). For cash fares, which are eligible for the credit only if they are paid in connection with specialized transit services offered to people with disabilities, the CRA documentation states that a taxpayer is required to keep a record of the rides booked and dated transfers as proof of rides on the service.

Vincent Didkovsky
S+C Partners LLP, Mississauga
Vincent.Didkovsky@scpllp.com

Canadian Tax Focus
Volume 7, Number 4, November 2017
©2017, Canadian Tax Foundation