Many Canadians want to reduce their overall tax burden and pay the lowest personal income tax rate. The fewer taxes we pay to the government, the more money we have to buy stocks, go to the movies, take a trip, or even keep away in our bank account for a rainy day.
Certain tax credits can help you reduce the taxes you have to pay. You may be eligible for tax credits like the digital news subscription tax credit, and you don’t even know about it.
If you read digital news content and have subscribed to digital news publications from qualified journalism organizations, you may be able to claim the digital news subscription tax credit.
This article discusses all you need to know about the digital news subscription tax credit, what it is, what qualifies for it, and how to calculate and claim it.
If you want to reduce your taxes with this tax credit, you should read on.
What is Digital News Subscription Tax Credit?
In 2019, the Canadian government introduced the digital news subscription tax credit to support Canadian journalism in achieving a more financially sustainable business model.
The digital news subscription tax credit is a non-refundable tax credit to offset the subscription costs paid by Canadians to a Qualified Canadian Journalism Organization (QCJO).
The digital news subscription tax credit only applies to qualifying subscription expenses made to a QCJO after 2019 and before 2025, whose primary focus is “original news written content.”
The Canadian government established the tax credit to encourage individuals to stay subscribed to Canadian digital news platforms by giving them a potential tax refund on their subscription costs.
The digital news subscription tax credit is non-refundable and can only reduce your federal tax. The credit must be greater than the tax you owe as the government will not pay any excess amount to you.
What Qualifies for the Digital News Subscription Tax Credit?
A qualifying subscription expense is an amount you paid as subscription cost in one year for a digital news subscription with a QJCO that does not hold a license defined in subsection 2(1) of the Broadcasting Act.
If you are subscribed to a journalism organization with this particular broadcasting license, your subscription will not qualify.
You must also have a subscription for digital news content that you consume primarily in written form to qualify for the digital news subscription tax credit. This would imply that a radio subscription like SiriusXM will not qualify.
A QCJO will have to confirm with the CRA by completing and submitting Form T622, Digital News Subscription Tax Credit – Eligible Subscription, to check if their offered subscriptions are qualified for the digital news subscription tax credit.
After confirmation of eligibility, eligible subscription names will be published on CRA’s list of QCJO. Check this list to ensure your subscription expenses qualify for the digital news subscription tax credit.
If the CRA does not list your QCJO, you should contact the organization to determine if they qualify for the digital news subscription tax credit. You may need to contact them before you claim this tax credit.
How Much is the Digital News Subscription Tax Credit?
Canada Revenue Agency multiplies the total costs of your qualifying subscription expenses in the year up to $500 by the lowest personal income tax rate.
The lowest personal income tax rate is 15% currently. This means you can claim a maximum annual tax credit of $75 ($500 x 15%).
So, for example, if your total qualifying subscription expenses for digital news to a QCJO is $300, you will get a tax credit of $45 ($300 x 15%).
However, CRA will split your tax credit between eligible parties if you are in a subscription agreement with more people, roommates, or spouses.
Suppose you have a subscription to non-qualifying news content, like non-digital content, or a radio subscription, like SiriusXM. In that case, you can only claim the tax credit on the stand-alone portion of the digital news content you can access.
If it is difficult to determine the stand-alone cost of the digital new content, you can use a comparable stand-alone cost to estimate the qualifying subscription expenses. Otherwise, you will receive a tax credit for only half of the total subscription cost.
How To Claim the Digital News Subscription Tax Credit
Starting from 2020 all the way to 2024, the digital news subscription tax credit can be claimed for qualified subscriptions on Line 31350 of your T1 Income Tax and Benefit Return.
People who bought an eligible subscription can exclusively claim the tax credit.
If over one person is eligible to claim the subscription expense for the year in question, the full amount can be divided between them.
It can be divided on the condition that the full amount claimed is lower than the highest amount allowed (if the claim had only been made by one person).
Who Can Claim the Digital News Subscription Tax Credit?
Any Canadian citizen or resident who files their income taxes and are subscribers, and has entered into a subscription agreement with a QCJO for a qualifying news subscription, is eligible to claim the digital news subscription tax credit.
Taking Winnipeg Free Press as an example, if you have a digital subscription with them, you can claim the tax credit.
However, if you have a print newspaper subscription with them, you can only claim the tax credit using the qualifying stand-alone subscription monthly rate of $16.99 plus GST.
- Maximum qualifying amount per monthly subscription payment:
$16.99 + 5% GST = $17.84 - Maximum qualifying amount per 13-week subscription payment:
$16.99 x 3 months + 5% GST = $53.52 - Maximum qualifying amount per 26-week subscription payment:
$16.99 x 6 months + 5% GST = $107.04 - Maximum qualifying amount per annual subscription payment:
$16.99 x 12 months + 5% GST = $214.07
Only the above maximum qualifying amounts are eligible to claim on your income tax return if you have paid more than the above amount for your print newspaper subscription.
However, if you have paid less than the above amounts, you can claim the full amount you have paid for your subscription.
Digital News Subscription Tax Credit List
The following are some of the most common publications in Canada that qualify for the tax credit:
- Toronto Star
- The Globe and Mail
- Acadie Nouvelle
- Hamilton Spectator
- Niagara Falls Review
- L’actualité
- Edmonton Journal
- Journal de Montreal
- Journal de Quebec
- Montreal Gazette
- National Post
- Edmonton Sun
- Toronto Sun
- Ottawa Citizen
- The Guardian
- Ottawa Sun
- The Vancouver Sun
- Winnipeg Sun
- Winnipeg Free Press
- Telegraph Journal
- London Free Press
- Times Colonist
- Calgary Sun
- Calgary Herald
- Alberta Today
- Regina Leader-Post
- Brandon Sun
- Medicine Hat News
- Le Canada Français
- The Daily Courrier
Here is a full list of eligible digital news subscriptions.
Other Income Tax Measures to Support Journalism
Aside from the digital news subscription tax credit, the Canadian government has established other income tax measures to support eligible journalism organizations.
Let’s take a brief look at some of the income tax measures.
1. Canadian Journalism Labour Tax Credit
The Canadian Journalism Labour Tax Credit is a refundable tax credit designed by the Canadian government to help Canadian news providers pay the salaries of their news employees.
The tax credit is available at 25% of a taxation year’s total qualifying labor expenditures.
To claim this tax credit, your organization must qualify as a QCJO, must publish only written news rather than television or radio news, and your business must meet the ownership conditions of the Canadian newspaper that is defined in the Income Tax Act.
The maximum Canadian Journalism Labour Tax Credit available to eligible organizations is $13,750 annually for each eligible newsroom employee. Qualifying labor expenditures are subject to a $55,000 annual cap per eligible newsroom employee.
Where the qualifying journalism organization is a partnership, the tax credit is calculated likewise but is divided between the qualified members of the partnership.
2. Registered Journalism Organization Requirements for Registration
The Federal Budget 2019 announced the creation of Registered Journalism Organizations as a new type of qualified donee. This exempts RJOs from income tax.
Qualified donees can issue donation receipts for gifts they receive. Individuals who donate may use the receipts to claim a charitable donation tax credit, and corporations who donate may use receipts to claim a deduction from taxable income on their income tax return.
Final Thoughts on Digital News Subscription Tax Credit
Purchasing subscriptions to a digital Canadian news platform could lead to you getting a tax credit. Before taking your next step, you need to confirm that the platform you are subscribed to is part of the QJCOs in Canada.
The tax credit can be claimed for qualified subscriptions on Line 31350 of your T1 Income Tax and Benefit Return.
The digital news subscription tax credit is not a very popular tax credit, but it could be useful if you are interested in online news platforms. It also assists online Canadian digital news media organizations to meet their financial targets.
Related: What is the Canada Training Credit Limit for 2022
FAQs on Digital News Subscription Tax Credit
What is the QCJO?
QJCO is an acronym that stands for qualified Canadian journalism organization. It refers to Canadian news platforms that can claim the Canadian journalism labor tax credit.
The subscription costs for digital news are considered eligible expenses for Canada’s digital news subscription tax credit.
Is the Globe and Mail Eligible for the Digital News Subscription Tax Credit
?
Yes, they are. The Globe and Mail is an eligible Canadian journalism organization that qualifies for the digital news subscription tax credit.
Can you claim digital news subscription tax credit?
Absolutely! You can claim digital news subscription tax credit if you have subscribed for digital news content to any qualified journalism organization.
What is considered a digital news subscription?
Any subscription made for digital news content (not printed on paper) to a qualifying news organization is considered a digital news subscription, and it is eligible to claim the digital news subscription tax credit.
Hi, I'm Adeola Adegoke. I am a licensed Insurance Broker in Manitoba, and I hold a master’s degree in Mathematical Sciences (with a major in Financial Modeling) from the African Institute for Mathematical Sciences (AIMS), Tanzania.
Also, I have a second master's degree in Statistics from the University of Regina, and I am currently pursuing my Ph.D. in Statistics at the University of Manitoba.
The primary purpose of Money Reverie is to help everyday Canadians make better financial decisions by providing up-to-date financial news and information, reports, product reviews, and government programs.
