NEW INFORMATION ABOUT CANADA FITNESS CREDIT

The federal government has released new information to guide parents who are saving receipts to claim the Canada Fitness Credit, in amounts up to $500 for eligible physical activities, effective January 1 of this year. Here are some additional facts for you to share with your colleagues and clients:

• The actual dollar amount is multiplied by 15.5% in 2007, which is the lowest marginal federal tax rate.
• The credit is claimed in the year the fees are paid, not the year the activities are taken.
• Receipts are required.
• Eligible children are those under 16 in the year.
• Eligible activities must relate to the cost of registration or membership in an eligible program of physical fitness activity.
• An eligible program of prescribed physical activity, will be defined as “an ongoing, supervised program, suitable for children, in which substantially all of the activities undertaken include a significant amount of physical activity that contribute to cardio-respiratory endurance,
  • plus one or more of:
  • muscular strength,
  • muscular endurance,
  • flexibility, and balance
• Length of programs must be at least eight weeks with a minimum of one session per week.
• Children’s camps will qualify if they run for a minimum of five consecutive days, provided more than 50 per cent of the program time is devoted to physical activity.
• Children’s memberships 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 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". Where the eligible portion of the programs constitutes 50 per cent or less of available programs can be pro-rated for the purposes of the credit. Family memberships must be prorated for the child's portion of the membership fees.
• Registration and membership costs can include the costs of administration, instruction, and the rental of facilities. However, payments for accommodation, travel, food, or beverages (for example, room and board at a fitness camp) must be deducted –they do not qualify for the tax credit.