My Public Transit Pass Credit PRESTO saga: information to help you as we again approach tax time!
I have claimed the public transit amount as a deduction almost every year since it was introduced. I stopped for the 2013 tax year when I gave up the TTC and walked to work daily. I started again with this years filing for the 2014 tax year as I moved out of downtown Toronto.
I had heard in the past that people were sometimes audited or required to provide proof of the claim at times. This makes sense since it is a very large deduction. In my case it was hundreds of dollars. I dutifully and carefully read the rules of the credit as they applied to PRESTO (from the CRA website):
Electronic payment cards if:
- the card is used to make at least 32 one-way trips over a maximum of 31 consecutive days; and
- the card is issued by a public transit authority that records and provides a receipt for the cost and usage of the card.
I moved from downtown Toronto to Mississauga in April of 2014 and started using GO Transit daily thereafter. However I have had a PRESTO card since they launched on GO many years ago, and I am very familiar with the intricacies of the Transit Usage Report (TUR) PRESTO makes available annually, however I had never actually claimed amounts for my PRESTO card before because I did not meet the above criteria of 32 trips in 31 days. I had been a weekend GO user only for some time.
I always Netfile my return on the first day allowed, and it was promptly accepted by CRA as always this year and by March I had my refund, which included a generous credit for the public transit amount.
In late August, I received a letter from CRA noting I had been 'randomly selected' to provide additional proof of my claim for the public transit amount. No problem, I thought. I printed off my PRESTO TUR, wrote a cover letter, and faxed it all off to CRA.
In the first week of November I received a letter from CRA saying that they had rejected the PRESTO TUR as valid proof of my claim. They cited the fact that my name was not actually on the report. Incredulous I pulled out the copy of the documents I sent and noted they were right: my transit usage report for my registered cards did not have my name on it. CRA reversed my claim and added penalties and interest.
CRA did suggested in their letter some options to prove that was my card. The most obvious being photocopying your card, showing your signature, and including a copy of that as proof. Unfortunately, I didn't have the card, or actually cards under which I made the claim.
I am the type that loses things. More than anyone else. In 2014 I lost my PRESTO card and had it replaced. Further, I also had to replace two PRESTO cards in 2014 because they cracked and stopped working. I have experienced that problem three times from 2011-2013. When you tap the card quickly as you walk past a reader it's easy to slide the card along, bending it and letting only one part touch.
This is really bad for the card. They do not take well even a small amount to bending.
Why does that matter?
PRESTO's transit usage report indicates only the card numbers that were used, so the PRESTO card I had in September 2015 was not the one I had used at all in 2014. I couldn't photocopy it as proof it was mine. I had tossed my cracked cards in the trash, never thinking I would need them again. and,of course, I couldn't have kept the cards I had lost.
The CRA suggested another alternative: contact PRESTO and have them issue a letter that shows your registered card history. I filled out the contact form on the PRESTO website and this actually worked perfectly. Five business days later I had my letter from PRESTO that showed my complete registered card history. I faxed it to CRA on October 1 and waited.
And waited.
Finally, yesterday, I received a letter from CRA saying my proof of the claim was accepted, and my claim had been reinstated... and... they were... increasing my claim and refunding me MORE money? What?
Remember that I moved to Mississauga in April 2014. Prior to that point in the year I had used my PRESTO card for some weekend GO trips to visit friends in various places, and the occasional TTC subway trip. That use in no way met the "32 one-way trips over a maximum of 31 consecutive days" rule. Yet, they gave me an additional refund on that anyway!
Available in my bank this morning (RBC makes Monday direct deposits available on Saturdays)
Lessons learned: if you are asked for proof of a public transit amount by CRA, include a photocopy of both sides of your PRESTO card to CRA with the transit usage report. If you have lost or replaced a card, email PRESTO and ask them for a letter that lists your card usage history and include it with the documentation to CRA.