Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: How is tax assistance received under the new transit pass credit initiative?
Position: Under the draft legislation an individual can claim a non-refundable tax credit for the cost of an eligible public transit pass used on or after July 1, 2006. The non-refundable tax credit is calculated using the lowest personal tax rate and is used to reduce federal income tax that would otherwise be payable.
Reasons: Draft legislation.
October 20, 2006
XXXXXXXXXX
Dear XXXXXXXXXX:
I am replying to your correspondence addressed to the Honourable Rona Ambrose, Minister of the Environment, concerning the public transit pass tax credit. I received a copy of your correspondence from Minister Ambrose on September 25, 2006.
On August 31, 2006, the Honourable James M. Flaherty, Minister of Finance, released the legislative proposals to implement some of the remaining 2006 Federal Budget measures, including the public transit pass tax credit. The draft legislation will allow an individual to claim a non-refundable tax credit on his or her income tax return for the cost of an eligible public transit pass used on or after July 1, 2006.
The non-refundable tax credit is calculated using the lowest personal tax rate, which will be 15.25 percent for the 2006 tax year and 15.5 percent for the 2007 and subsequent tax years. The amount of an individual's non-refundable tax credits is used to reduce the amount of the individual's federal income tax that would otherwise be payable for the year.
I appreciate the opportunity to respond to your question.
Sincerely,
The Honourable Carol Skelton, P.C., M.P.
Randy Hewlett
613-957-2049
October 3, 2006
2006-020854
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