Many Canadian businesses remain challenged and are struggling to survive in 2021. One particular group that needs saving is the bearer of COVID-19 updates and other noteworthy news. The Canada Revenue Agency (CRA) introduced the Digital News Subscription Tax Credit (DNSTC) in 2020 to entice taxpayers to help local media outlets.
Don’t forget to claim the brand-new DNSTC if you have subscriptions to CRA-designated qualified Canadian journalism organizations (QCJO). You could get a maximum tax credit of $75 in 2021 if you spent $500 on qualifying subscriptions in 2020. This particular tax credit is available until 2024, so you can claim it for four years more.
Digital format only
If you wish to extend help, your QCJO partner must be producing originally written news in digital form. Check if it carries a broadcasting licence, because that will disqualify your subscription. The CRA is specific and will allow standalone digital subscription only.
In case the subscription is both digital and non-digital (newsprint), only the digital format will be the eligible subscription. More than one person can claim a qualifying subscription expense in a year, with the claiming parties (spouses, partners, roommates, etc.) splitting the tax credit. The subscription expense must not exceed $500.
Unique and noble financial incentive
The DNSTC is not much compared (15% of $500) with other CRA tax credits. However, it’s a unique and noble financial incentive for taxpayers. Your qualifying subscription will sustain the business model of QCJOs that under pressure to remain financially viable.
When you pay for your digital news subscription, ask for the official receipt. You will use it as documentary proof when claiming the DNSTC. The CRA also mandates QCJOs to issue an official receipt from where subscribers can see the QCJO designation number.
Because of the lockdowns, the federal government hopes the number of people accessing news digitally will increase. If digital readership soars, it would be a shot in the arm of QCJOs. Canadians should also prioritize local news to reduce the threat of international media outlets.
Earn $500 in passive income
You can recover the $500 expense for a digital news subscription by purchasing $9,750 worth of Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) shares. The third-largest bank in Canada pays a lucrative 5.13% dividend. It’s a great idea if you’re finding ways to complement your tax credit with passive income.
Scotiabank is taking the lead in promoting economic resilience among disadvantaged groups in Canada. Through ScotiaRISE, the bank will support programs and partner with organizations across its footprint. The new initiative is a 10-year, $500 million program that will provide people with the tools to improve education, employment prospects, adapt to changing circumstances, and increase the likelihood of financial success.
According to Brian Porter, Scotiabank’s president and CEO, the bank is committed to making investments that strengthen communities today and for generations to come. The design of ScotiaRISE focuses on giving greater access to opportunities that help more people, households, and communities across the bank’s footprint to participate more fully in the economy.
All-important tax break
CRA’s DNSTC and ScotiaRISE have one thing in common. Both programs are much-needed help for sectors that needs urgent upliftment. Canadian taxpayers should heed the call and subscribe with a QCJO to claim the all-important tax break.
The post CRA 2021: Don’t Forget to Claim the $500 Digital News Tax Credit! appeared first on The Motley Fool Canada.
Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends BANK OF NOVA SCOTIA.
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