Tax breaks are great, and Canadian taxpayers welcome any initiative that reduces the taxes they have to pay. If you read digital news for entertainment or education, you could reduce your taxes. However, to get tax relief on your new digital subscription, you must subscribe to digital news publications published by qualified journalism organizations. Getting Tax Credit To Read: Pinch Me, I Must Dream.
The Canada Revenue Agency (CRA) allows Canadian taxpayers to claim tax credits and deductions to pay lower income tax. More recently, in 2019, the Government of Canada introduced a bill to support Canadian journalism. They introduced a tax break for digital news subscriptions. The Digital News Subscription Tax Credit is non-refundable and applies only to eligible subscription expenses incurred for a Qualified Canadian Journalism Organization (QCJO) between 2019 and 2025.
Non-refundable tax credits only reduce your federal tax. The credit must be greater than the tax due. The government will not pay you any excess. To qualify for tax relief on a digital news subscription, the subscription must be a qualifying expense.
What expenses qualify for digital news subscription tax relief
When does your digital news subscription expense qualify for Digital News Subscription Tax Credit? When it comes to subscribing to digital news with a qualified Canadian journalism organization. The organization cannot hold a specific type of broadcasting license. Additionally, the digital news content you consume must be primarily in written form.
Qualified Canadian Journalism Organizations (QCJOs) must confirm with the CRA whether the subscriptions they offer qualify for the Digital News Subscription Tax Credit. They can do this by using form T622, Digital News Subscription Tax Credit – Qualifying Subscription. Once eligibility is confirmed, the CRA will publish a list of qualified QCJOs. It’s important to check this list to make sure you’re eligible for tax relief on your subscription expenses.
What happens if you subscribe to a Canadian journalism organization that is not listed by the CRA? You can contact the organization to find out if they qualify for digital news subscription tax credit. While journalism organizations are obliged to inform their subscribers, if they are no longer eligible for digital news subscription tax relief, you may need to proactively contact them before claiming the relief.
How to claim tax relief for a digital news subscription
Claiming tax relief for a digital news subscription is an easy and straightforward process. If you have qualifying digital news subscription expenses, you can report them on line 31350 of your T1 form when you file your income tax and benefits return. When filing your tax return, you do not need to submit your actual subscription receipts to a qualified Canadian digital news content journalism organization. However, you will need to keep your receipts in case the CRA requests to see them.
How to calculate tax relief for a digital news subscription
The maximum digital news subscription tax credit you can claim on your tax return is $75. It is calculated using the 15 per cent prevailing tax rate, which is the lowest personal income tax rate applied by the Canada Revenue Agency for non-refundable tax credits. This rate applies to all eligible digital subscription spends up to $500.
Examples of digital news subscription tax credit in action
For example, if your total qualifying digital news subscription expense for a journalism organization is $200, you could get a $30 tax credit ($200 x 15%). You can claim tax relief if you subscribe under a subscription contract. If more people participate in a subscription agreement, you can divide the tax relief among eligible people. However, please note that the total claim of all parties to the subscription agreement cannot exceed the maximum amount of USD 75.
For example, if you and your spouse enter into an annual digital news subscription deal worth $500, the calculated tax credit of $75 (15% x $500) will be split between you and your spouse. If you have a qualifying subscription that provides access to ineligible news content, such as some non-digital content, you will only be able to claim the stand-alone portion of the digital news content that you have access to as part of your subscription.
If you are unable to determine the stand-alone cost for some digital content, you can use a comparable stand-alone cost and estimate the eligible subscription cost. If a separate cost for digital messages cannot be determined or a comparable cost cannot be obtained, then only half of the total cost of the subscription is eligible for tax relief.
Who can claim digital news subscription tax relief?
To qualify for digital news subscription tax relief, you must file a tax return. There are certain conditions that you may not realize apply to you. If you make eligible digital news subscription expenses and fall into any of the tax payer categories listed below, you can claim digital news subscription tax relief.
- You have to pay tax for the year.
- You want to apply for a refund.
- You want to claim Canada Work Benefit (CWB) or you received CWB advances during the year.
- You or your spouse or partner want to start or continue receiving government benefits such as the Canada Child Benefit (CCB), GST/HST credit or Guaranteed Income Supplement (GIS)
- The CRA has sent you a request to file a return.
- You and your spouse or partner decide together how to divide your retirement income.
- You have disposed of capital property (which may be your main residence) or made a taxable capital gain during the year.
- You must repay all or part of your retirement or employment insurance benefits.
- You have not repaid all the amounts you withdrew from a Registered Retirement Savings Plan (RRSP) under the Home Buyers Plan or Lifelong Learning Plan.
- You must contribute to the Canada Pension Plan (CPP) for 2020. This may apply if your total net self-employment income and pensionable employment income exceeds $3,500.
- You pay Employment Insurance premiums on your self-employment or other qualifying income.
- You suffered a non-capital loss in the year you want to be eligible to apply for the grant.
- You want to roll over unused tuition or unused tuition, education and textbook amounts to next year.
- You want to report income that would allow you to contribute to a Registered Retirement Savings Plan (RRSP), Pooled Registered Pension Plan (PRPP), or Specified Pension Plan (SPP) to keep your RRSP deduction limit current for future years.
- You want to transfer unused investment relief from expenses incurred in the current year to next year.
When a qualified Canadian journalism organization sends an application to a CRA to confirm whether it qualifies to offer qualifying subscriptions under the Digital Subscription Tax Credit, the CRA will include it on the published list. You can see the names of eligible Canadian journalism organizations, eligible subscriptions and associated publications. The rating agency updates this list regularly and includes journalist organizations when it is confirmed.
If a journalism organization is no longer eligible, your subscription will no longer qualify for Digital News Subscription Tax Credit. Again, the list is refreshed frequently. Typically, if you have an existing subscription to a qualified Canadian journalism organization on the list, your subscription will still be eligible.
Some popular publications qualify for the digital news subscription tax
Some of Canada’s best-known newspapers qualify for the digital news subscription tax credit. Almost all regions of the country are located here.
- Toronto star
- Globe and mail
- Albert today
- Calgary Sun
- Herald of Calgary
- Brandon Sun
- Guardian
- Montreal Journal
- Quebec Journal
- New Acadia
- Hill times
- French Canada
- Ottawa Sun
- London Free Press
- Regina Leadership Position
- Montreal Gazette
- National Post Office
- Telegraph Journal
- Vancouver sun
- Times Colonist
- Winnipeg Sun
The list is not exhaustive and is updated by the CRA upon approval or removal of a qualified Canadian journalism organization.
