Tax credits are great and Canadian taxpayers welcome every initiative that reduces the taxes that they have to pay. If you read digital news content for entertainment or education purposes, then you may can reduce your taxes. However, to get the digital new subscription tax credit, you have to subscribe to digital news publications from qualified journalism organizations. Getting a tax credit to read: pinch me, I must dreaming.
The Canada Revenue Agency (CRA) allows Canadian taxpayers to claim tax credits and deductions to pay less income tax. More recently, in 2019, the Canadian government introduced a bill to support Canadian journalism. They introduced the digital news subscription tax credit. The digital news subscription tax credit is non-refundable and only applies to qualifying subscription expenses made to a qualified Canadian journalism organization (QCJO) between 2019 and 2025.
Non-refundable tax credits only reduce your federal tax. The credit has to be greater than the tax you owe. The government won't pay you any excess amount. To qualify for the digital news subscription tax credit, your subscription must be a qualifying expense.
What expenses qualify for the digital news subscription tax credit
When does your digital subscription expense qualifies for the digital news subscription tax credit? When it is for a digital news subscription with a qualified Canadian journalism organization. The organization cannot have a certain type of broadcasting license. Also, the digital news content that you consume must primarily be in written form.
Qualified Canadian journalism organizations (QCJO) need to confirm with the CRA if their offered subscriptions qualify for the digital news subscription tax credit. They can do this using Form T622, Digital News Subscription Tax Credit – Eligible Subscription. After confirmation of eligibility, the CRA will publish a list of qualified QCJO. It is important to check this list to ensure that you can get the tax credit for your subscription expenses.
What 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 the digital news subscription tax credit. Although journalism organizations are required to inform their subscribers if they no longer qualify for the digital news subscription tax credit, you may need to proactively contact them before you claim the credit.
How to claim the digital news subscription tax credit
Claiming the digital news subscription tax credit is an easy and straightforward process. If you have eligible digital news subscription expenses, you can claim them on Line 31350 of your T1 form when filing your Income Tax and Benefit Return. You do not have to submit the actual receipts of your subscription to a qualified Canadian journalism organization for digital news content when filing your taxes. However, you will need to keep your receipts in case the CRA requests to see them.
How to calculate the digital news subscription tax credit
The maximum digital news subscription tax credit that you can claim on your tax return is $75. This is calculated by using a 15 percent applicable tax rate, which is the lowest personal income tax rate that the Canada Revenue Agency applies to non-refundable tax credits. This rate is applies to on all your eligible digital news content subscription expenses up to $500.
Examples of the digital news subscription tax credit in action
For example, if your total qualifying digital news subscription expense to a journalism organization is $200, you can get a tax credit of $30 ($200 x 15%). You can claim the tax credit if you subscribed through a subscription contract. If there are more people in the subscription agreement, then you can split the tax credit between the eligible individuals. However, note that the combined claim by all parties in the subscription agreement cannot exceed the maximum amount of $75.
For example, if you and your spouse enter a $500 annual subscription agreement for digital news content, the calculated tax credit of $75 (15% x $500) will be shared between you and your spouse. For an eligible subscription that provides access to non-qualifying news content such as a non-digital content portion, you will be able to claim only the stand-alone portion of the digital news content that you have access to as a result of your subscription.
If you cannot determine the stand-alone cost of the digital content portion, then you can use a comparable stand-alone cost and estimate the qualifying subscription expense. In the you cannot determine a stand-alone cost for the digital news or you cannot get a comparable cost, then only half of the total subscription cost is elgible for the tax credit.
Who can claim the digital news subscription tax credit?
You have to file your taxes to be eligible for the digital news subscription tax credit. There are certain conditions that you might not realize apply to you. If you incur qualifying digital news subscription expenses and fall into any of the taxpayer categories listed below, you can claim the digital news subscription tax credit.
- You have to pay tax for the year.
- You want to claim a refund.
- You want to claim the Canada workers benefit (CWB) or you received CWB advance payments in the year.
- You or your spouse or common-law partner want to begin or continue receiving government benefits such as the Canada child benefit (CCB), GST⁄HST credit, or the Guaranteed Income Supplement (GIS)
- The CRA sent you a request to file a return.
- You and your spouse or common-law partner are jointly electing to split pension income.
- You disposed of capital property (which could be a principal residence) or you realized a taxable capital gain in the year.
- You have to repay all or part of your old age security or employment insurance benefits.
- You have not repaid all the amounts you withdrew from your registered retirement savings plan (RRSP) under the Home Buyers' Plan or Lifelong Learning Plan.
- You have to contribute to the Canada Pension Plan (CPP) for 2020. This can apply if your total net self-employment income and pensionable employment income is more than $3,500.
- You are paying employment insurance premiums on self-employment income or other eligible earnings.
- You have incurred a non-capital loss in the year that you want to be able to apply in other years.
- You want to transfer unused tuition fees or carry forward unused tuition, education, and textbook amounts to a future year.
- You want to report income that would allow you to contribute to a registered retirement savings plan (RRSP), a pooled registered pension plan (PRPP), or a specified pension plan (SPP) to keep your RRSP deduction limit for future years up to date.
- You want to carry forward to a future year the unused investment tax credit on expenditures you incurred during the current year.
The digital news subscriptions tax credit: some qualifying media
After a qualified Canadian journalism organization sends a request to the CRA to confirm if they qualify to offer eligible subscriptions for the digital subscription tax credit, the CRA will include them in a published list. You can see the names of the qualified Canadian journalism organizations, qualifying subscriptions, and associated publications. The CRA updates this list regularly and includes journalism organizations as they get confirmed.
If a journalism organization no longer qualifies, your subscription will no longer qualify for the digital news subscription tax credit. Again, the list is refreshed often. Usually, when you have an existing subscription with a qualified Canadian journalism organization on the list, your subscription will continue to qualify.
Some common publications that qualify for the digital news subscription tax
Some of Canada's best-known newspapers qualify for the digital news subscription tax credit. Nearly every region of the country is here.
- Toronto Star
- The Globe and Mail
- Alberta Today
- Calgary Sun
- Calgary Herald
- Brandon Sun
- The Guardian
- Journal de Montréal
- Journal de Québec
- Acadie Nouvelle
- Hill Times
- Le Canada Français
- Ottawa Sun
- London Free Press
- Regina Leader-Post
- Montreal Gazette
- National Post
- Telegraph Journal
- The Vancouver Sun
- Times Colonist
- Winnipeg Sun
The list is not exhaustive and it gets updated by the CRA upon the confirmation or removal of a qualified Canadian journalism organization.