The Children’s Fitness Tax Credit

March 11, 2008

By Brad Smith

The Children’s Fitness Tax Credit became effective January 1, 2007. A parent may earn a credit of up to $500 for each child under the age of 16 years. If you use the entire credit, this represents a tax saving of $75.00 per child.

An eligible program must be:

  1. ongoing (either a minimum of eight weeks duration with a minimum of one session per week or, in the case of children’s camps, five consecutive days);
  2. supervised
  3. suitable for children; and
  4. substantially all of the activities must include a significant amount of physical activity that contributes to cardio-respiratory endurance plus one or more of: muscular strength, muscular endurance, flexibility, or balance.

You can only claim fees that relate to the cost of registering a child in an eligible program of physical activity. The portion of the fee for accommodation, meals, or transportation is not eligible. If the program fee includes eligible and ineligible expenses, the organization will determine the part of the fee for which you will receive the tax credit.

You cannot make a claim for a Children’s Fitness Tax Credit if another person has claimed the credit for the same amount or there was a claim for the same amount under the child care expense deduction.

You will need a tax receipt, but it does not need to be issued by a charity. The tax receipt should be issued by the organization that operates a program eligible for the Children’s Fitness Tax Credit.

We recommend that you ask for a tax receipt at the time that you pay for or register in the program .

You claim the Children’s Fitness Tax Credit in the year it was paid. For example, you cannot claim the Children’s Fitness Tax Credit this year if the fees were paid in a prior year (even if the activity continues this year).

The Children’s Fitness Tax Credit does not only apply to sports. It applies to any children’s recreational programs involving significant physical activity (for example, dance lessons).

This is a new program and thus some organizations may not be aware of the ability to issue a receipt for the Children’s Fitness Tax Credit. We recommend you ask the organization at the earliest opportunity.

DISABLED CHILDREN

The Children’s Fitness Tax Credit is available to children under the age of 18 if they are eligible for the disability tax credit. An additional $500 tax credit will be available when a minimum of $100 is spent on registration fees for an eligible program.

Please go to the following for more information:

Canada Revenue Agency – Children’s Fitness Tax Credit
http://www.cra-arc.gc.ca/whtsnw/fitness-eng.html

Department of Finance Canada
http://www.fin.gc.ca/news06/06-084e.html