As of 2025, Canada has reinstated a long-lost public transit tax credit, offering significant commuting savings for everyday Canadians. With rising living costs, this return of a 15% non‑refundable credit on eligible transit passes makes public transit more affordable and encourages sustainable travel habits.
What’s Included in the 2025 Transit Tax Credit?
- A 15% non‑refundable tax credit applies to the cost of eligible public transit passes—including monthly, annual, or electronic fare cards.
- Eligible transit options include buses, streetcars, subways, commuter trains, and ferries, so long as they qualify under the federal guidelines.
- In Ontario, seniors (65+) benefit from a refundable tax credit, enabling claims of up to $3,000 in transit expenses—yielding a maximum return of $450 per year.
Benefits of the Transit Tax Credit
| Feature | Details |
|---|---|
| Credit Rate | 15% non‑refundable federal tax credit on eligible transit passes |
| Eligible Transit Types | Buses, streetcars, subways, commuter trains, ferries |
| Ontario Seniors’ Credit | Up to $3,000 eligible expenses, yielding max $450/year refundable |
| Claim Year | Tax credit claimed in the year expenses incurred |
| Accessibility | Available to commuters nationwide; seniors in Ontario have extra benefit |
How to Claim This Transit Tax Credit
- Collect receipts for eligible transit passes purchased within the tax year.
- Claim the total cost on your federal tax return using Line 364 of Schedule 1.
- If you live in Ontario and are 65+, file for the refundable seniors’ transit credit to maximize your return.
- Partners or dependents’ transit costs can also be included in your claim—just ensure they have not claimed it themselves.
Why This Credit Matters in 2025
- A 15% rebate helps reduce the financial burden of commuting, especially for frequent riders.
- Offsetting transit costs encourages public transit use, reducing traffic congestion and environmental impact.
- Seniors in Ontario now have a dedicated refundable benefit, enabling further savings on transportation.
- This change supports economic relief amid increased living costs and fuel prices.
The reintroduction of Canada’s public transit tax credit for 2025 brings welcome relief to daily commuters nationwide.
With a 15% federal credit on qualifying transit costs, plus enhanced support for seniors in Ontario, Canadians can save more while opting for greener travel. Ensure you save your receipts and submit your claim for substantial savings during tax season.
