Widespread job losses and business closures have left many people struggling to pay bills, find work, and save money. To help households navigate the financial challenges posed by a devasted economy, the Government of Canada has introduced numerous tax benefits. First announced in the 2019 federal budget. The Digital News Subscription Tax Credit (DNSTC) is one such tax break that aims to provide financial relief to Canadians.
What Is The Digital News Subscription Tax Credit?
The DNSTC is a non-refundable tax credit. It is offered to individuals who pay for digital news subscriptions to qualified Canadian journalism organizations (QCJO). The credit is valid for subscription expenses paid from 2020 through 2024.
The purpose of the DNTSC is to encourage people to support Canadian digital news media organizations. As these organizations are facing increasingly stiff competition from social media and alternative news websites.
Are you working from home? Check out which home office expenses you can claim this tax season.
How Do You Make A Claim For Digital News Subscription Tax Credit?
To claim the DNSTC, follow these steps:
Step 1. Determine If Your Subscription Qualifies
Your digital news subscription must be for a QCJO for you to be eligible for the DNSTC. You can confirm if the media organization is a QCJO by visiting the CRA’s website. The government maintains a list of those that qualify for the designation.
Any media outlet that wishes to be on this list must file Form T622, Digital News Subscription Tax Credit – Eligible Subscription with the CRA. However, some media organizations that offer qualifying subscriptions may not appear on the CRA’s list. They may have not yet had their application processed or have simply chosen not to submit Form T622. In that case, you should contact the organization to confirm their status as a QCJO.
Step 2. Obtain Documentation
The QCJO you’ve entered into a subscription agreement with you will issue you a receipt. Your receipt will contain its QCJO designation number. Be sure, you keep all your receipts in case the CRA asks to see them.
Step 3. Select The Credit On Your Tax Return
When you file your taxes, you claim the DNSTC by filling out line 31350 on your tax return form. You can do so for each year you have qualifying subscription expenses during the period 2020 to 2024.
Which Digital News Subscriptions Qualify For This Tax Credit?
To be able to claim the DNSTC on your income tax return, you must have paid your digital news subscription to a media organization designated as a QCJO. Only content delivered digitally is eligible for the tax credit; any non-digital content doesn’t qualify. In cases where content is accessible in both print and digital formats, you can only claim the digital portion.
The Canada Revenue Agency (CRA) maintains a list of media organizations formally designated as QCJOs. Each QCJO has a unique designation number. If your subscription is for an organization with a QCJO number, you’re eligible to claim the DNSTC.
If the media organization you’ve subscribed to no longer qualifies as a QCJO, you can still claim the DNTSC. You’ll need to prove that you purchased your subscription prior to losing its QCJO status. The CRA requires organizations to inform their subscribers if their subscriptions are no longer eligible for the credit.
How Much Can You Claim?
The maximum DNSTC you’re entitled to is calculated by multiplying 15% (the lowest personal tax rate) by your total qualifying subscription costs during the year up to $500. This translates to an annual tax savings of $75.
If you claim the maximum amount each year during the qualifying period (2020 – 2024), your total tax savings amounts to $75. Moreover, you can choose to split the DNTSC with your spouse or partner. The total amount claimed doesn’t exceed the maximum of $500.
Learn how to file your taxes as a couple.
Looking For Other Tax Credits?
If you’re struggling to cover your expenses, there are a few other tax credits that can help ease the financial burden. Some government benefits include social assistance programs, child assistance programs, senior assistance programs and other related benefit programs.
However, if you’re not eligible for any of the government benefits, you can get a personal loan to help cover the costs of your expenses. This can help spread the cost over a few months to a few years, making your monthly payments more affordable. Before you take a loan, be sure to check your credit as your credit standing can affect your approval odds and the terms you qualify for.
Having said that, it’s also important to remember not to overextend yourself. If you’re already struggling with debt and are unable to qualify for a consolidation loan. You should consider speaking to a credit counsellor to help you find the right debt relief program for you.
Additional Reading
Digital News Subscription Tax Credit FAQs
How to calculate my Digital News Subscription Tax Credit amount?
What are some companies that qualify for the Digital News Subscription Tax Credit?
How do I apply for the Digital News Subscription Tax Credit?
Bottom Line
The DNSTC is not one of the most generous tax credits available. But, it can help offset some of the subscription costs paid for by avid consumers of digital news media content. The credit is also easy to claim, with no complicated forms to fill out. And with many peoples’ income streams decimated by COVID-19, any extra money saved during tax season is mighty helpful.
