Principal Issues: If an individual pays membership or registration fees in 2007 for a program of physical activity that begins in 2006 and ends in 2007, will the individual be able to claim the Children's Fitness Tax Credit in relation to the fees paid?
Position: Yes.
Reasons: A prescribed program of physical activity includes a program that begins in 2006 and ends in 2007 as long as the program meets all of the requirements stated in section 9400 of the Income Tax Regulations.
2008-026909 XXXXXXXXXX François Bordeleau, Advocate March 4, 2008
March 4, 2008
Dear Sir,
Subject: Children's Fitness Tax Credit
This is in response to your email of February 12, 2008 in which you asked whether a program of physical activity, beginning in 2006 and ending in 2007, can qualify for the children's fitness tax credit ("CFTC").
More specifically, you referred to a situation where parents pay fees for their children's enrolment or membership in physical activity programs at their school. You indicated that these programs start in 2006 and end in June 2007. If the registration fee is paid in 2007, you wish to know if the registration or membership fee is eligible for the CFTC.
Unless otherwise indicated, all statutory references herein are to the provisions of the Income Tax Act (the "Act").
The provisions dealing with the CFTC apply in respect of any amount paid on or after January 1, 2007 by an individual in respect of the registration or membership of an eligible child in a prescribed program of physical activity. Those provisions provide that an individual may claim the CFTC, in respect of an eligible fitness expense, in the taxation year in which the expense was paid.
A prescribed program of physical activity includes a program that began in 2006 and ends in 2007 provided that all the requirements of section 9400 of the Income Tax Regulations are satisfied. Thus, in the present situation, the entire fee paid in respect of the program of physical activity would qualify for the CFTC to the extent that the program is a prescribed program of physical activity.
Best regards,
Randy Hewlett
Manager
Business and Partnerships Section
Business and Partnerships Division
Income Tax Rulings Directorate.