The Ontario Seniors’ Public Transit Tax Credit (OSPTTC) gives a bit of a financial boost to Ontario’s senior citizens by refunding them a portion of the amount of money they spend on certain types of public transportation. The refundable tax credit allows older adults to claim up to $3,000 of eligible public transit expenses and receive up to a $450 refund from the government yearly. While there are many changes to Ontario taxes for 2018, this change may help you keep hundreds of dollars in your pocket.
Eligible Seniors for the Transit Tax Credit
Just like the working tax credit has eligibility requirements, older adults must satisfy two requirements to qualify for the Ontario seniors’ public transit tax credit:
- They must be 65 by Jan. 1 of the year for which they are claiming the credit.
- They must be living in Ontario on Dec. 1 of the same year.
To illustrate, if they turn 65 on Feb. 1 or move away from Ontario on Dec. 1, they wouldn’t qualify for the refund.
Effective Date to Claim the Ontario Transit Tax Credit
- The Ontario Transit Tax Credit effective date is July 1, 2017, so only transportation expenses incurred after that date are eligible.
- As of 2018, eligible older adults may claim the amount for the full year up to $3,000 and receive up to $450.
Eligible Transit Expenses
- Only public transport companies operated by the province of Ontario or by municipalities within Ontario are eligible, even if they travel outside the province.
- Transport must be of the type that typically returns passengers within one day.
- Transport must serve the public.
- Travel may be by bus, subway, train, or tram.
- Specialized services for the disabled are eligible (even if they paid cash for the service as described below).
- Expenses for using single-ride tickets or tokens are eligible if they have a receipt showing the transit carrier’s name, the purchase date, and the amount they paid. The receipt must also show their name. Otherwise, they need a credit card or bank statement showing a record of the purchase.
- Taxpayers may claim transit expenses for limited- and unlimited-use passes and purchases they made with electronic payment cards such as Presto, but they need a receipt unless they can produce the pass or detailed electronic payment card record.
Older adults must normally purchase senior-fare tickets to apply for a refund. The adult fare ticket purchases are not eligible for a refund unless the carrier does not make senior-fare passes available.
There are some expenses that aren’t covered, including:
- Payments to private carriers such as Via Rail
- Cash fare for conventional public transit services
Keep in mind, though, that cash fares for specialized services are eligible if the taxpayer can establish they paid for the service by producing a record of booking the ride and proof of taking the ride on the service.
Claiming the Credit
Older adults can claim this credit directly on their personal income tax form. Accountants with clients who are older adults should advise them to save their receipts and explain the eligibility guidelines for this credit. If they need help preparing their income tax returns or filing for the tax refund, they can also obtain help for free from volunteers in their community under the Community Volunteer Program.
In today’s fast-paced world, working on the go from various devices is practically a necessity. Keep your clients happy and help grow your business by using a cloud-based accounting solution. Accelerate your year-end adjustment process and start saving time on corporate returns with QuickBooks Online Accountant. Sign up for free.