One of the measures announced in the 2006 federal budget was a proposed new tax credit for public transit use. You are able to claim the cost of transit passes of a monthly (or longer) duration on your income tax return.

To claim the credit you must:

• keep your expired monthly passes;
• put your name and address on the back of each pass
• obtain a dated receipt, or keep your cancelled cheques or credit card statements, to support the claim.

For 2008, the credit will apply to the portion of a pass used for travel on or after January 1, 2008. 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, and is then deducted from your tax otherwise payable.

You can claim this credit on behalf of your spouse or common-law partner, and your children under the age of 19, to the extent that these amounts have not already been claimed.

Additional information on how to claim the tax credit for public transit passes can be found on the Environment Canada website.