Fitness Tax Credit Almost Child's Play | FBC, Canada's Farm & Small Business Tax Specialist

Fitness Tax Credit Almost Child's Play

The federal government's Children's Fitness Tax Credit helps parents seeking support for ferrying their children far and wide to hockey, soccer, swimming and other sporting activities will receive financial relief, but not much.

The program provides a non-refundable tax credit that applies to eligible expenditures incurred to enroll children in organized, qualified physical activities.

A parent may claim up to $500 per year per child under 16 years of age for items such as registration, membership costs, instruction and rental facilities.

However, costs for accommodation, food and beverages and travel are not covered. For example, that means camp room and board don't meet the test.

To qualify, an activity must be supervised and ongoing for at least eight weeks with one session per week.

A minimum 30 minutes per session of sustained but moderate physical exertion is required for children younger than 10 and one hour for children older than that. The program must also provide at least one of the following physical benefits: muscular strength; muscular endurance; flexibility and balance.

Camp-style programs that operate for a minimum of five consecutive days also qualify, provided at least 50 percent of the program time is devoted to physical activity, as do extracurricular physical activities at school and memberships in gyms and recreational centres. Regular school physical training activities do not qualify.

Obvious sporting activities such as hockey, football, soccer, swimming, basketball and swimming easily qualify but so do karate, folk dancing, horseback riding and some sailing activities. Specifically excluded, however, are sporting endeavors that use automobiles, motorcycles, power boats and snowmobiles.

Although the maximum claim of $500 per child sounds impressive, the end impact on your tax filing is somewhat less significant. To calculate the tax credit, you multiply physical activity expenses by the lowest marginal tax rate of 15.5 percent, which amounts to a whopping maximum federal credit per child of $77.50.

Children younger than 18 with disabilities have an additional non-refundable credit of $500 available to them subject to a spending minimum of $100 on fees for an eligible program.

The tax credit is applied to the year when the fees are paid, not when the activity takes place.

The purpose of this tax credit, ostensibly, is to stimulate more children to participate in regular physical activity for its positive effects by helping parents defray some of the costs.

It is unlikely, however, that the program will produce a generation of lean and mean super athletes.

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