Principal Issues:
Whether XXXXXXXXXX are eligible for the children's fitness tax credit?
Position:
If all conditions are met, it could be eligible.
Reasons:
The law.
XXXXXXXXXX
Dear XXXXXXXXXX :
The office of the Honourable James M. Flaherty, Minister of Finance, forwarded to me a copy of your correspondence concerning the eligibility of XXXXXXXXXX for the children's fitness tax credit. Please accept my apology for this delayed response.
In general terms, the children's fitness tax credit is based on the amount an individual paid in the year, up to a maximum of $500, as an eligible fitness expense for his or her child who is under the age of 16 at the beginning of the year. The term "eligible fitness expense" is defined in the Income Tax Act as a fee attributable to the cost of the child's registration or membership in a prescribed program of physical activity.
The Income Tax Regulations define a "prescribed program of physical activity" for the purpose of the children's fitness tax credit to include, among other things, a membership of eight or more consecutive weeks in an organization in which more than 50% of all activities offered to children by the organization include a significant amount of physical activity. The term "physical activity" is defined in the Regulations as a supervised activity suitable for children that contributes to cardio-respiratory endurance plus either muscular strength, muscular endurance, flexibility, or balance.
For example, if XXXXXXXXXX a program providing two hours of activities per week for ten weeks that includes 1 hour 15 minutes of physical activity per week, the program would be considered a prescribed program of physical activity and the fee for the cost of the child's membership would be eligible for the children's fitness tax credit.
However, if a membership in an organization does not meet the 50% activities requirement but meets all of the other requirements, the Regulations indicate that the membership will still be a prescribed program of physical activity. In such a case, only a prorated part of the amount paid for the child's membership will be eligible for the children's fitness tax credit. The prorated part will be based on the percentage of all activities offered to children by the organization which include a significant amount of physical activity. For example, if 40% of all activities that are offered include a significant amount of physical activity, then 40% of the amount paid for the membership will be eligible for the children's fitness tax credit.
Although the Canada Revenue Agency (CRA) administers the credit, it will not be making general determinations as to whether a particular activity is either eligible or ineligible. The organization offering the program has the detailed knowledge necessary to determine if all requirements of the legislation are being met. Provided all the requirements are satisfied, XXXXXXXXXX programs could be eligible for the credit.
More detailed information about the children's fitness tax credit is available on the CRA Web site at www.cra.gc.ca/ fitness and www.cra.gc.ca/whtsnw/chcklst-eng.html.
I trust that the information I have provided is helpful.
Sincerely,
Jean-Pierre Blackburn, P.C., M.P.
Isabelle Landry
(613) 957-8971
2009-031802