Principal Issues: Does the new children's fitness tax credit discriminate against children with disabilities?
Position: In connection with the children's fitness tax credit, the Department of Finance has announced measures to provide additional support to children who are eligible for the disability tax credit :
1) the age limit for the children's fitness tax credit will be increased from 16 to 18 for children who are eligible for the disability tax credit
2) in recognition of the additional expenses incurred by children with disabilities for such things as specialized equipment, transportation and attendant care, a separate $500 non-refundable amount will be introduced and will be available where expenses of at least $100 are incurred to enrol a disability tax credit-eligible child in an eligible program.
July 6, 2007
XXXXXXXXXX
Dear XXXXXXXXXX:
Thank you for your email received on May 29, 2007, concerning the children's fitness tax credit as it relates to persons with disabilities.
The children's fitness tax credit is a measure introduced by the Government of Canada to provide parents with a non-refundable tax credit on eligible amounts of up to $500 paid to register a child under the age of 16 in an eligible program of physical activity.
The Honourable James M. Flaherty, Minister of Finance, has confirmed two measures that will be implemented to provide additional support to children who are eligible for the disability tax credit to recognize the challenges they face in becoming more active. The Income Tax Act will be amended to provide that eligible expenses incurred for disability tax credit-eligible children up to the age of 18 will qualify for the children's fitness tax credit. Furthermore, in light of the additional expenses incurred by children with disabilities for such things as specialized equipment, transportation, and attendant care, the Act will be amended to introduce a separate $500 non-refundable amount for disability tax credit-eligible children subject to spending a minimum of $100 on registration fees for an eligible program.
You are of the view that the children's fitness tax credit is discriminatory because a disabled child might be unable to participate in an eligible program due to his or her disability. In such a situation, the child's parents will not have incurred the registration cost associated with enrolment in a fitness program, which specific cost constitutes the basis of the fitness tax credit. However, there are other tax credits and income deductions available to disabled persons or their parents or caregivers regarding expenses incurred in respect of an individual's disability. For more information about these measures, you may refer to Interpretation Bulletin IT-519R2 (Consolidated), Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, which is available on the Canada Revenue Agency Web site at www.cra.gc.ca/E/pub/tp/it519r2-consolid/it519r2-consolid-e.html.
I appreciate the opportunity to address your concerns.
Sincerely,
The Honourable Carol Skelton, P.C., M.P.
Renée Shields
(613) 957-2049
2007-023982
June 14, 2007