Gymnastics, art class, music lessons, swimming, soccer, hockey, ballet – the list of extracurricular activities you can sign your children up for is astonishing. While they all seem vital to developing a well-rounded child, many parents make the decision to choose certain activities over others based on their eligibility for the Children’s Arts Tax Credit or the Children’s Fitness Tax Credit.
In 2011, the Government of Canada introduced the Children’s Arts Tax Credit. This is a non-refundable tax credit that reduces the amount of tax you owe. Parents may claim up to $500 per year for eligible art expenses paid for each child who is under 16 years of age at the beginning of the year in which the expenses are paid. The credit is calculated by multiplying the total expense by the lowest marginal tax rate, 15%, not your actual tax rate.
The Children’s Fitness Tax Credit was introduced in 2007. This credit also provides a non-refundable tax credit. It’s based on eligible fitness expenses paid by parents to register a child in a prescribed program of physical activity. Like the art credit, it permits a claim of up to $500 per year for children under the age of 16. It too is calculated by multiplying the total expense by the lowest marginal tax rate, 15%, not your actual tax rate.
Claiming the maximum for one of the programs will result in a $75 credit per child, per year. Raising a Renaissance man or woman? Enrolling them in qualified art and fitness programs can result in a $150 credit per child, per year.
Wondering what types of programs qualify? The short answer is simple: ask the organization you’re considering enrolling your child with if their program is eligible. If they are, they’ll know it!
Ok, you want the long explanation. For the Children’s Arts Tax Credit, the activities must contribute to the development of creative skills or expertise in artistic or cultural activities. Eligible expenses are fees paid for the cost of registration or membership, which includes the costs of administration, instruction, and the rental of facilities or equipment.
For the Children’s Fitness Tax Credit, expenses must be for the cost of registration or membership of a child in a physical activity program. Generally, such a program must be ongoing (either a minimum of eight consecutive weeks long or, for children’s camps, five consecutive days long), be supervised, be suitable for children, and include a significant amount of physical activity that contributes to cardio-respiratory endurance, plus one or more activity that contributes to muscular strength, muscular endurance, flexibility, or balance.
In both cases, expenses not included in registration or membership, such as uniforms, equipment or travel is not eligible.
The organization you’re handing your kids off to will be able to tell you if they are eligible for the credit, and they’ll determine the part of the fee that qualifies for the tax credit. Don’t forget to request a receipt for tax purposes!
The government has created helpful videos that explain each program in a way that is easy to understand, even for those hopeless when it comes to understand taxes.
Watch the Children's Arts Tax Credit video
Watch the Children's Fitness Tax Credit video
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When Melissa Vroon, co-founder of familyfuncanada.com, received an invoice for a transaction she didn’t remember, she began investigating. It turns out she had been the victim of credit card fraud. Though her banking institution reimbursed her, she still wanted answers. The invoice was billed to her name and address but had a different name and address for where the item was to be shipped. After some research, Vroon tracked the fraud down to a company, and the HR department assisted her in tracking down the employee involved in the fraud.
“It was very frustrating because it is not a simple case of changing my credit card number,” says Vroon. “I pay most of my bills on my credit card so I had to go down the list and contact each one to advise them my credit card had been compromised. Then I had to wait a couple of weeks to get a new card sent to me, which meant I didn’t earn any reward points for purchases during that time. Plus, purchases on the old card that needed to be returned were issued a store credit rather than a refund.”
While victims of fraud are protected and will not suffer any financial losses resulting from circumstances beyond their control, as Vroon points out, sorting out fraud can be a time consuming and frustrating process. It can take hours, days or weeks—even in some cases, months—to correct your financial identity.
One growing concern for Canadians is preventing online fraud. With the increasing popularity of smartphones, tablets and social media sites, fraudsters have sophisticated ways of tricking consumers into revealing personal information. According to the 2012 TD Canada Trust Fraud Prevention Month poll, many Canadians are worried about emerging types of fraud such as online fraud (84%), malicious social media apps (77%), phishing (72%) and fraudulent cell phone apps (61%).
"As technology continues to evolve, so too are the tricks fraudsters use to try and steal your personal information," says Justin Hwang, Associate Vice President, Fraud Management, TD Canada Trust. "Banks and credit card companies have sophisticated security measures in place and work closely with law enforcement to protect their customers, but it is important to remember that you are the first line of defence."
Hwang says an emerging type of fraud consumers should watch out for is malicious smartphone and social media apps that are designed to steal personal information, which is then used to commit fraud.
"It's encouraging to see so many Canadians are taking steps to protect themselves from fraud, but remember that fraudsters can lurk in unsuspecting places - including social media sites and even in mobile phone app stores—so it's important you remain vigilant," he says. "Always be cautious when downloading apps for your cell phone, tablet or computer. Try to stay with apps from well-known and trusted brands. For example, mobile banking apps from major financial institutions, like the TD Canada Trust mobile app, maintain a high level of security and integrity so are safe and secure to use."
In support of Fraud Prevention Month, TD Canada Trust has developed a new quiz to help Canadians determine how fraud-savvy they are and learn what they can do to help protect themselves:
3RD ANNUAL TD CANADA TRUST FRAUD PREVENTION QUIZ
1. True or False: If your bank needs to contact you, they may email you and ask you for your account information.
False: Your bank will never contact you by email asking for account information. If you have been emailed for this information then you have likely been "phished." Phishing refers to an online scam that seeks out personal financial information from people who believe they are sharing their information with a legitimate website or organization.
2. True or False: The anti-virus and anti-spyware software on your computer is sufficient to protect your personal information
False: Anti-virus and internet security software only helps protect your personal information if the software is up-to-date, and if it has the latest firewall installed. Fraudsters are always developing new ways to obtain your personal information online. For example, if malicious software gets uploaded onto your device it can track what you do online, tap into your personal information and even create spam that comes under the identity of a friend. Always be cautious when downloading apps.
3. True or False: There are simple clues to figure out whether or not a website is safe.
True: To see if a site is secure, check the lower corner of your browser window or to the right of the address bar, for a padlock. Any time you're on a screen to send personal information, make sure the padlock is closed or the key is intact. This indicates that security technology will scramble your personal information as it's being transmitted. As well, the secure website address will begin with "https://".
4. True or False: Sending an e-mail money transfer gives you the same security as online banking.
True: One of the biggest misconceptions about e-Transfers is that they are not secure. In reality, e-Transfers offer the same level of security and confidentiality as any online banking transaction. The e-mail notification of the transfer doesn't include the money or any banking information, only a notification of the pending transfer. In order for the recipient to collect the money, they must log into their own online banking service and correctly answer a security question.
5. True or False: It's not as important to be vigilant about transactions in brick and mortar stores because most fraudsters have moved online and found new ways to get personal information.
False: It's ALWAYS important to protect your personal information, on or offline. Financial institutions continually upgrade the sophisticated security measures they have in place to protect customers from fraud (e.g. CHIP technology on cards), but you should also do what you can to protect yourself by knowing where your cards are at all times and shielding the keypad when you enter your PIN.
For more information on fraud prevention, you can visit: http://www.td.com/privacyandsecurity/protect_yourself.jsp
Did you enjoy this blog post? You might like Fraud Prevention for Holiday Shoppers or Why Choose a Credit Union.
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