Children’s Fitness Tax Credit  Information Page

As most of our members are already aware, the Canadian Government has created a new tax credit to help encourage physical activity in children. This credit comes into effect for the 2007 tax year.

The government has outline criteria for what must appear on an official receipt in order for parents to be able to claim the credit. The ITSportsNet development department is currently working to ensure that the receipts generated by our online registration and Point Of Sale (POS) registration systems are compliant. This new receipt will be available to all customers currently using Online Registration and POS as soon as we have completed its development.

How the Credit Works and What Your Organization Needs to Know

The children’s fitness tax credit will allow parents to claim a maximum of $500 per year for eligible fees paid for each child under 16. The government has defined an eligible fee as only the registration and/or membership portion of a fee. Registration and membership costs can include the costs of administration, instruction, and the rental of facilities. They can not include late fees, accommodation, travel, food, or beverages. For example, if you are running an away from home soccer camp and the registration fee is $500:
$200 player fee

$200 hotel rental

$100 food costs

Only the $200 player fee is eligible for the tax credit.

All receipts issued manually require an authorized signature. Any electronically generated receipt does not require the signature.

In addition, if you offer a family discount or an early bird discount etc… that discount will affect the eligible amount.

ITSN will be changing our online registration setup and online registration renewal setup forms to allow our customers to incorporate a break down of their fees.

What Parents Need to Know

Only children under the age of 16 are eligible for the tax credit. So long as your child is 15 years old on January 1^st of the tax year, they are eligible. Essentially, if you child is under 16 at any point during that year, they qualify.

Only programs that have been paid for in the current tax year will be eligible. If you paid for a sports program in 2006, it is not eligible, even if the program runs in 2007. The government has based program eligibility on the date it was paid for rather than the date(s) the program takes place.

Links

For more information or to contact a government official with questions/comments/complaints, please visit the links below:

To find/contact your member of Parliament, please click here: http://www.parl.gc.ca/information/about/people/house/PostalCode.asp?Source=SM

The Minister of Finance, The Honourable Jim Flaherty, can be reached via email at: jflaherty@fin.gc.ca

The Minister of National Revenue, The Honourable Carol Skelton, can be reached at: www.carolskelton.ca/craemail.html

The Prime Minister can be reached via email at: mailto:pm@pm.gc.ca

More information on the Children’s Fitness Tax Credit can be found at:

http://www.cra-arc.gc.ca/fitness/

More information on which sports/activity programs are eligible for the credit can be found at: http://www.fin.gc.ca/news06/06-084e.html

Backgrounder

1. Proposed Definition of a Program of Prescribed Physical Activity

An eligible program of prescribed physical activity, for the purposes of the credit, will be defined as

An ongoing, supervised program, suitable for children, in which substantially all of the activities undertaken include a significant amount of physical activity that contribute to cardio-respiratory endurance, plus one or more of:

• muscular strength,
• muscular endurance,
• flexibility, and
• balance.

This definition will cover many sports, as well as other children’s recreational programs that also involve significant physical activity, such as dance lessons. It recognizes that the practice of any sport or physical activity does not always call on cardio-respiratory endurance, notably in the initial learning stages. Eligibility of a program would be based on the general nature of the activities, and the benefits of involvement over time. The definition will also take into account the average participants’ age, health, skills, presence of a disability, and other relevant factors.

• In keeping with the expressed purpose of the tax credit, and in the spirit of Canada’s Physical Activity Guides for Children and Youth published by the Public Health Agency of Canada, programs of prescribed physical activity for which tax receipts are issued should encourage children to strive towards at least 30 minutes of sustained moderate to vigorous physical activity per session for children under 10, and 60 minutes of sustained moderate to vigorous physical activity for children 10 and over.

• By requiring a supervisory presence and by referring to activities that are "suitable for children", the proposed definition acknowledges parents’ role in assuring the safety of their children. It reminds those delivering programs of prescribed physical activity for children that safety is paramount and that such programs should comply with federal and provincial safety regulations.

2. Categories of Eligible Programs

In addition to the above definition, and in order to recognize the many ways in which children are enrolled and participate in organized physical activity, the Income Tax Regulations will provide that programs are eligible for the tax credit if they last at least eight weeks at a minimum of one session per week, or, in the case of children’s camps, five consecutive days—provided in the latter case that more than 50 per cent of the program time is devoted to physical activity.

A child’s membership in a club, association or other organization for two months or more would also be considered participation in an eligible program if more than 50 per cent of the programs available as a result of membership are in the nature of an "eligible program", or more than 50 per cent of the available time is devoted to activities in an "eligible program".

Membership and registration fees for programs where the eligible portion of the programs constitutes 50 per cent or less of available programs could in general be pro-rated for the purposes of the credit.

As well, that portion of a family membership covering a child’s participation in an eligible program will be eligible, and the organization will be able to issue a tax receipt for that portion.

While fees charged for extracurricular programs that take place at a school will be eligible, the credit will not cover fees charged for regular school physical education programming.

Sporting, recreational and other activities in which motorized vehicles (e.g., automobiles, motorcycles, power boats, airplanes, snowmobiles) are used as an essential component of the activity will also be excluded.

3. Measures for Children With Disabilities

In recognizing the particular challenges that children with disabilities face, the Income Tax Act will be amended to raise the age limit for disability tax credit (DTC)-eligible children from under 16 to under 18 years of age for the purposes of the Children’s Fitness Tax Credit. The Act will also be amended to introduce a separate $500 non-refundable amount for DTC-eligible children subject to spending a minimum of $100 on registration fees for an eligible program. This additional non-itemizable amount provides general recognition of the extra costs that children with disabilities encounter in becoming involved in programs of physical activity, notably with regard to specialized equipment, transportation and attendant care.