Principal Issues: Whether a program for children's swimming lessons held for 30 to 45 minutes each day during nine days can be a prescribed program of physical activity pursuant to paragraph 9400(2)(b) of the Regulations.
Position: Yes. Assuming that all the other conditions are met, a program for children's swimming lessons could be an eligible program for the credit when it is held for at least five consecutive days, during which at least 50% of the daily activity during the program hours each day involved a significant amount of physical activity.
Reasons: In order to meet the requirement that 50 % of the daily activities include a significant amount of physical activity, CRA will consider the duration of all the daily activities provided under the program. The legislation does not require a minimum daily duration time.
XXXXXXXXXX 2009-031193 I. Landry, M. Fisc. June 10, 2009
Dear XXXXXXXXXX :
Re: Children's Fitness Tax Credit
This is in response to your email of February 27, 2009 in which you requested our comments regarding the eligibility for the children's fitness tax credit of a program for children's swimming lessons held for 30 to 45 minutes each day during nine days.
Unless otherwise stated, all statutory references in this letter are references to the provisions of the Income Tax Act, R.S.C. 1985 (5th supp.) c. 1, as amended (the "Act").
The situation outlined in your email relates to completed transactions involving a specific taxpayer. As explained in Information Circular 70-6R5, Advance Income Tax Rulings, it is not this Directorate's practice to comment on transactions involving specific taxpayers other than in the form of an advance income tax ruling. For situations involving completed transactions, all relevant facts and documentation should be submitted to the appropriate tax services office for their views. However, we are prepared to offer the following general comments, which may be of assistance.
In general terms, the children's fitness tax credit is based on the amount paid in the year, up to a maximum of $500, by an individual as an eligible fitness expense for his or her child who is under the age of 16 at the beginning of the year. The expression "eligible fitness expense" is defined in the Act as a fee attributable to the cost of the child's registration in a prescribed program of physical activity.
The Income Tax Regulations ("Regulations") define a "prescribed program of physical activity" for the purpose of the children's fitness tax credit to include, among other things, a program, that is not part of a school's curriculum, of a duration of five or more consecutive days of which more than 50% of the daily activities include a significant amount of physical activity. The expression "physical activity" is defined in the Regulations as a supervised activity suitable for children that contributes to cardio-respiratory endurance plus one or more of muscular strength, muscular endurance, flexibility, or balance.
In order to meet the 50 % of the daily activities requirement, the Canada Revenue Agency ("CRA") will consider the duration of all the daily activities provided under the program. In that respect, the legislation does not require a minimum daily duration time of activities. Consequently, when a program is held on at least five consecutive days, during which all of the daily activity involved a significant amount of physical activity, it is our view that such a program would be a prescribed program of physical activity and the fee attributable to the registration cost in such program would be eligible for the children's fitness tax credit.
If a taxpayer did not claim the children's fitness tax credit in the year that the eligible fitness expense was paid, the taxpayer can not claim it in a subsequent year. However, the taxpayer can change his/her tax return in order to claim the children's fitness tax credit in the year that the eligible fitness expense was paid. The taxpayer should send to her/his tax center form T1-ADJ, T1 Adjustment Request or a signed letter containing the details of the request. Further information on adjustment requests can be found on our web site at http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/chngrtrn-eng.html.
We trust these comments will be of assistance.
Yours truly,
Louise J. Roy, CGA
Manager
For Acting Director
Ontario Corporate Tax Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch