New Ontario Children’s Activity Tax Credit
Refundable tax credit: Ontario Children’s Activity Tax credit is refundable which means all parents including parents with little or no income tax will receive a credit.
Eligible purchases starting January 1, 2010.
Ontario Children’s Activity Tax Credit is a refundable tax credit based on eligible expenses that involve children enrolled in activities which encourage children to be healthy and active.
Included in the eligible expenses are a number of non-fitness activities that fall under one of the following categories:
• Instruction in music, dramatic arts, dance and visual arts.
• Language instruction.
• Activities with a substantial focus on wilderness and the natural environment.
• Structured interaction among children where supervisors teach or help children develop interpersonal skills.
• Enrichment or tutoring in academic subjects.
Parents may claim up to $500.00 of eligible expenses per child. They would receive a refundable tax credit worth up to $50 per child under 16 years of age or up to $100 for a child with a disability under age 18.
Activities Eligible for the Federal Tax Credit and Ontario’s Tax Credit
- Adapted fitness for youth with disabilities
- Figure skating
- Horseback riding
- Ice Skating
- Track and field
- Water Polo
Additional Organized or Instructional Activities Eligible for Ontario’s Credit
- After-school extracurricular activities
- Cooking for kids
- Cardiopulmonary resuscitation (CPR)
- First Aid
- Gardening for kids
- Girl Guides
- Leadership development
- Music composition and theory
- Musical instruments
- Non-medical therapeutic activities for children with a disability
- Public speaking
- Voice lessons
Eligible expenses would include registration and membership fees, as well as fees paid to cover the cost of uniforms, equipment used in common, renting facilities, referees, judges, incidental supplies (e.g., trophies), administration and instruction.
Eligible fees would not include fees paid to cover the cost of accommodation, travel, food, beverages, the purchase or rental of equipment for exclusive personal use, any amounts paid to the individual’s spouse or common-law partner, or to anyone under 18 years of age.
- Ineligible Activities
- Activities offered free of charge.
- Activities that are unsupervised or not suitable for children.
- Activities that are part of a school’s curriculum.
- Activities that do not meet all the requirements, including duration.
- Activities for which fees are paid to a spouse or common-law partner or a person under age 18.
Other Ineligible Activities for which Other Tax Support is Provided
- Activities for which expenses would qualify for the charitable donation tax credit.
- Activities for which expenses would qualify for the Ontario political contribution tax credit.
- Activities for which expenses can be claimed for the child care expenses deduction. However, any amount that cannot be claimed as a deduction could be claimed for the Children’s Activity Tax Credit as long as all other requirements are met.
To be eligible, programs would have to meet rules regarding duration and the proportion of eligible activities that must be offered. These rules are the same as the federal Children’s Fitness Tax Credit, and can be found at www.cra.gc.ca.
The Canada Revenue Agency would make final determinations regarding the eligibility of particular activities, programs and expenses.
These lists present examples and are not exhaustive.
GENERAL PROGRAM REQUIREMENTS
To be eligible, a program would be required to meet rules regarding duration and the proportion of eligible activities that must be offered, and not be part of a school’s curriculum. Rules regarding duration and the proportion of eligible activities that must be offered would be the same as the federal Children’s Fitness Tax Credit:
• Is the program suitable for children?
• Does the program operate for a minimum of eight consecutive weeks or over a period of at least five consecutive days?
• If your program or membership operates for a minimum of eight consecutive weeks, answer Question A, B, or C below, whichever applies. If your program operates for at five consecutive days, answer Question D below.
A. If the program operates weekly with one or more sessions per week, do about 90% or more of the activities in the program include a significant amount of physical activity?
B. If the program is offered to children by a club, association or similar organization in circumstances where the child can select from various activities, do more than 50% of the activities require a significant amount of physical activity, or more than 50% of the program time spent on physical activities?
C. If the organization offers a membership, do more than 50% of the activities offered to children by the organization include a significant amount of physical activity?
D. Do more than 50% of the daily activities in the program include a significant amount of physical activities?
• Is a supervisor present and sufficiently engaged to encourage active participation by the children?
Note: Explicit instruction or coaching is not needed to meet this requirement.
OTHER TAX CREDITS
The Children’s Activity Tax Credit would not be provided where the expenses would already qualify for a charitable donations tax credit or a political contributions tax credit.
Expenses that are eligible for both the child care expenses deduction and the Children’s Activity Tax Credit would first be required to be claimed as a child care expenses deduction. Any unused part could be claimed for the tax credit.