Children's Fitness Tax Credit (Federal)
See also: Children's Activity CreditStarting in 2007, a non-refundable tax credit will be allowed on eligible amounts of up to $500 per child ($1000 for a disabled child) paid by parents to register a child in an eligible program of physical activity. Children must have been under the age of 16 at the beginning of the year (or under 18 if disabled).
An eligible fitness expense is a fee paid to a “qualifying entity” to the extent that the fee is attributable to the cost of registration or membership of the child in a “prescribed program of physical activity”. Under current regulations, a prescribed program is a program which is NOT part of a school’s curriculum.
The Department of Finance has indicated that, in order to qualify, a program must be:
- 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);
- Supervised;
- Suitable for children; and
- 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. In the case of a disabled child, it is sufficient that the activity results in movement and an observable expenditure of energy in a recreational context.
You can only claim fees that are related to the cost of registering a child in an eligible program of physical activity. Equipment and other associated costs (such as travel and accommodation to participate in out of town events) don’t count.
Organizations that offer eligible programs must issue receipts. Each organization will determine the part of the fee that qualifies for the credit. Receipts should contain:
- the organization’s name and address;
- the name of the eligible program or activity;
- the total amount received, date received, and the amount that is eligible for the children’s fitness credit;
- the full name of the payor;
- the name and year of birth of the child; and
- an authorized signature (if the receipt is not electronically generated).
The year in which the credit is claimed is determined by the date when the fees are paid, not when the activity takes place.
Note that the credit can be split with another person as long as that person has not claimed the same expenses and the total claimed is not more than the maximum amount that would be allowed if only one person was claiming the amount.
When expenses are eligible for a deduction for child care expenses and also give entitlement to the children’s fitness amount, the expenses must be deducted as child care expenses first. Any unused portion can be claimed for the children’s fitness tax credit as long as the other conditions are met (e.g. summer sports camps).
