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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