Did you know that if you put your child in an eligible physical activity program, you could get a tax credit from the government?
There is a federal program called the Children’s Fitness Tax Credit (CFTC), which allows parents to claim a tax credit, if eligible. The credit is designed to help Canadian families financially in getting their children into fitness programs.
What are eligible fitness programs for which the credit can be claimed?
- Golf lessons;
- Horseback riding;
- Bowling and more.
How does it work?
You claim a credit for your child’s fitness activity in the tax year in which he or she was enrolled in a physical activity. Initially, you can claim up to $500 per child. In 2014, the federal government doubled the amount to a possible maximum limit of $1000 per child.
Another change made in 2014 was that the credit will be made refundable starting in 2015 and forward. This was designed to help low-income families.
If your child is also eligible for the disability tax credit. then an extra $500 is available. However, to qualify for the disability tax credit you must have paid a minimum of $100 in eligibility fees for the physical activity to be able to claim the credit.
What are eligibility fees?
Eligibility fees are monies paid for registration or membership for your child in a prescribed program of physical activity.
In order to qualify for the credit, your child must have been 16 years of age or under.
Children with disabilities
If the child is eligible for the disability tax credit, then the age of eligibility rises to 18 years of age and under. In addition, the registration or membership fees must have been paid early in the year.
How does the Canada Revenue Agency calculate the credit?
CRA calculates the credit by taking the lowest personal income tax rate and multiplying it by the eligible fees for each child.
Eligible fees for the CFTC are presently reported on line 365 of Schedule 1, Federal Tax.
What if I have an amount that can qualify as both child care expenses and the children’s fitness credit?
In the case where you have eligibility for both, the first amount that has to be claimed is the child care expense.
Child care expenses are expenses that you or someone else (spouse or common-law partner, etc.,) has paid for someone else to look after a child (who is eligible for the expense), so that you would be free to:
- Carry on a business either alone or as an active partner;
- Earn income from employment;
- Attend school under the conditions identified under Educational program; or
- Carry on research or similar work, for which you or the other person received a grant.
Once you have claimed the child care expenses, any unused amounts from can be claimed under the children’s fitness credit, if eligibility is met.
Provincial child fitness credits
Some provinces and territories also provide child fitness credits apart from the federal program.
For instance, British Columbia has its own child fitness credit that mimics the federal credit. In Manitoba, they introduced a fitness tax credit in 2011. The program is for young adults between the ages of 16 to 24. Eligible fitness activities up to $500 can be claimed.
One thing to keep in mind is that tax credits can be increased, decreased or withdrawn by the federal or provincial governments. A fitness tax credit is not necessarily guaranteed for future tax years.
For example, in Nova Scotia, the Sport and Recreational Expenses for Children tax credit was eliminated as of January 1, 2015.
Should you need help in filling out a tax return and ascertaining what tax credits you can claim, contact an accountant or a tax lawyer.
Children’s Fitness Tax Credit
Eligibility for Children’s fitness amount
British Columbia Basic Tax Credits
Department of Finance Canada
Fitness Tax Credit Manitoba
Healthy Living Tax Credit Nova Scotia