Principal Issues: 1. Eligibility of programs for either the fitness or arts tax credits.
Position: 1. A specific program cannot qualify for both the fitness and arts tax credits. If there are two distinct programs, the organization should issue two receipts or only one receipt that clearly shows the amount paid for each program.
Reasons: 1. The legislation.
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Dear XXXXXXXXXX:
The office of the Honourable James M. Flaherty, Minister of Finance, sent me a copy of your correspondence, which I received on April 12, 2013, asking for information about the children's fitness tax credit (CFTC) and the children's arts tax credit (CATC) as they relate to the costs of training elite amateur athletes.
A specific program cannot qualify for both the CFTC and the CATC. However, when there are two distinct programs and each program is eligible for one of the credits based on the conditions for each tax credit, then an individual could claim both tax credits for a qualifying child.
Although the Canada Revenue Agency (CRA) administers the CFTC and the CATC, organizations are best positioned to determine if the programs they offer qualify as a prescribed program of physical activity or a prescribed program of artistic, cultural, recreational, or developmental activity for the purposes of either tax credit.
If the activity includes two distinct programs and one program is eligible for the CFTC and the other for the CATC, the organization should issue two receipts or only one that clearly shows the amounts paid to the organization for each program.
You can find more information on the CRA Web site about the CFTC at www.cra.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns360-390/365/menu-eng.html and the CATC at www.cra.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns360-390/370/menu-eng.html.
The CFTC and the CATC are the only measures available under the Income Tax Act to help families in supporting their efforts to promote physical and cultural activities. When athletes progress to elite levels, the Government of Canada also supports its amateur athletes by way of program funding through Sport Canada and its partnerships with the Canadian Olympic Committee and Own the Podium.
I trust that the information I have provided is helpful.
Yours sincerely,
Gail Shea, P.C., M.P.
Minister of National Revenue
Robert Dubis
905-721-5191
2013-048574