Children's Fitness Tax Credit (CFTC)

Starting in 2007, the Government of Canada proposes to allow a non-refundable tax credit on eligible amounts of up to $500 paid by parents to register a child, who is under 16 at anytime during the year (18 for children eligible for the disability tax credit) in an eligible program of physical activity. The credit is available for amounts paid in 2007. Amounts paid in 2006 do not qualify even if all or part of the activity takes place in 2007.
In order to qualify for the tax credit, an eligible program must be:

• ongoing (either a minimum of eight weeks duration with a minimum of one session per week or, in the case of children's camps, five consecutive days, provided in the latter case that more than 50 per cent of the program time is devoted to physical activity.);

• supervised and suitable for children;

• Substantially all of the activities must include a significant amount of physical activity that contributes to cardio-respiratory endurance plus one or more of: muscular strength, muscular endurance, flexibility, or balance.

Programs of prescribed physical activity for which tax receipts are issued should encourage children to strive towards at least 30 minutes of sustained moderate to vigorous physical activity per session for children under 10, and 60 minutes of sustained moderate to vigorous physical activity for children 10 and over.

A child’s membership in a club, association or other organization for two months or more would also be considered participation in an eligible program if more than 50 per cent of the programs available as a result of membership are in the nature of an "eligible program", or more than 50 per cent of the available time is devoted to activities in an "eligible program". Membership and registration fees for programs where the eligible portion of the programs constitutes 50 per cent or less of available programs could in general be pro-rated for the purposes of the credit.

Only fees that relate to registering a child in an eligible program of physical activity are claimable for this tax credit. Additional items which may be included in the registration fee such as travel, meals or equipment are not eligible for this credit.

While fees charged for extracurricular programs that take place at a school will be eligible, the credit will not cover fees charged for regular school physical education programming.

You will need to keep the receipts issued by the organizations that deliver the programs. You will not need to submit receipts when you file your tax return, but you must keep them in case CRA asks for them when verifying your claim. The receipt should include the organizations name and address, name of the eligible program, amount and date payment was received, amount eligible for the CFTC, name of taxpayer, name of child and their year of birth as well as an authorized signature.

If you have any questions or believe you may qualify for this tax credit, please contact your local DJB office to discuss with one of our tax professionals.