Please Note: Important changes to the Children’s Fitness Credit were included in the 2016 Federal Budget. It is no longer available starting with the 2017 tax year. Learn more about the changes here.
Sports have been known to build confidence, character and self-esteem in children. Along with these benefits, however, comes expenses for parents. The children’s fitness tax credit helps parents get back some of those costs associated with sports programs. June Fitzmartyn, a CPA and tax professional based in Vancouver, B.C., says that each year, many of her clients come in, receipts in hand, ready to take advantage of this tax credit.
What Sports Apply?
A variety of sports apply as eligible sports for this credit. The Canada Revenue Agency cites hockey, bowling, golf lessons and horseback riding as a few examples of the sports that your child may play for you to receive this credit. If your child participates in a sport at her school, this also makes you eligible to receive this credit. To be eligible for the children’s fitness credit, the CRA indicates criteria a sport must meet: The sport must be ongoing. That is, it must go for at least eight consecutive weeks in a row. Or, in the case of a camp program, it must last at least five days in a row. The sport needs to be supervised and suitable for child participation. The sport must involve physical activity. It also needs to include one additional benefit such as that it improves muscular strength, endurance, balance or flexibility.
What Are The Other Criteria?
To apply for this credit, your child must be under age 16 at the beginning of the tax year in which you paid the fees for your child’s sport program. If your child also receives the disability amount, the age limit increases to under 18. Additionally, you must have paid at least $100 in expenses during the year. According to Fitzmartyn, these fees must be “direct fees, only fees paid to an administration… such as, ski passes, attendance fees and equipment fees.” You cannot include indirect fees, such as amounts you paid for gasoline when you drove your child to practice.
How Much Is The Credit?
For tax year 2015, you are allowed to claim expenses of $1000 per child (you can claim an additional $500 if your child is eligible for the disability tax credit). You can only claim expenses you incurred during the applicable tax year. Even if your child’s sport runs from September to June, for instance, as long as you paid the fees before Dec. 31, those fees apply. If you paid the fees after Jan. 1, you would have to wait until next year to claim those fees. Of that $1000, you end up receiving 15 percent federal tax credit which equates to a tax savings of $150 per child. This tax savings comes in the form of a now refundable credit. If you have no tax owing, you may receive a refund based on the Children’s Fitness Activity Credit alone.
For tax year 2016, the Children’s Fitness Credit will be reduced to a maximum of $500. The supplemental $500 for qualifying disabled children will remain in effect. For tax years 2017 and beyond, the credit will no longer be available.
Anything Else You Should Know?
You cannot claim fitness expense amounts for which you were reimbursed. Additionally, if the fitness expenses you paid also fall under childcare expenses, the childcare expenses deduction comes first. This means you must apply any of these expenses that apply under both categories first as childcare expenses, and any remaining amount you may claim as children’s fitness expenses. It is also essential that you hold onto your receipts for any expenses you incurred relating to this credit. The CRA may request documentation for any or all of your child’s fitness expenses.
References & Resources
- June Fitzmartyn, CPA, Vancouver, B.C.
- Canada Revenue Agency: Line 365 – Children’s Fitness Amount
- Canada Revenue Agency: Children’s Fitness Tax Credit