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Here’s a gift: The new children’s arts tax credit

Posted by on Jun 19, 2011 in Income Tax, Moneyville | 0 comments

By: Sheryl Smolkin

Read this article and comments at Moneyville.ca 

When our children were young, we took them to swimming lessons and struggled through two years of hockey with my reluctant son. But the activities they really loved and stuck with for many years were choir, drama and art classes.

However, like many parents with big mortgages and small children, it was often a struggle for us to come up with the money for these expensive extra-curricular programs. That’s why it’s so good to see that this month’s federal budget brings in a Children’s Arts Tax Credit similar to the Children’s Fitness Tax Credit introduced in 2007.

The 15 per cent non-refundable tax credit is based on up to $500/child of eligible expenses paid for the cost of registration or membership in a variety of artistic, cultural, recreational or developmental activities.

The credit is calculated by multiplying 15 per cent times the eligible amount for each child. The maximum is $75 ($500 x 15%.)  But if your child plays the piano and soccer you can claim both the arts and fitness credits which is another maximum of $75. So, for families with two or more children, the amounts can add up.

The program applies to children under 16 at the beginning of the year the expenses are paid and children under 18 eligible for the disability tax credit. Also, if at least $100 in eligible expenses has been paid for by a child eligible for the disability tax credit, an additional amount of $500 can be claimed for that child.

The definition of “eligible activities” is broad enough to cover virtually any non-sports related program that contributes to the development of creative skills or expertise in artistic or cultural activities.   You must do them for eight consecutive weeks or five consecutive days, when over 50 per cent of the time is scheduled for eligible activities. Something that is part of a school program is ineligible.

You ‘ll need a receipts, but they do not have to be sent in when you file your tax return. Hang on to thenm, in case the Canada Revenue Agency asks you to verify the claim.

Our son and daughter are adults. He is an avid cyclist and she regularly works out at the YWCA and takes yoga classes. But there are still many people who do not get  the minimum recommended amount of exercise into their daily routine. Last fall the Organization for Economic Co-operation and Development reported that 25 per cent of Canadians are obese, and the rate is expected to increase by 5 per cent over the next 10 years.

I think in the next budget the federal government should extend the fitness tax credit to Canadians of all ages. If this gives more of us the incentive to get up off the couch and get moving, it will be money well spent.

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