Ontario Children's Activity Tax Credit
Ministry of Finance
To help parents with the cost of enrolling their children in activities that encourage them to be healthy and active, the government is proposing to introduce a new Children's Activity Tax Credit. This would be the only tax credit in Canada provided for a comprehensive range of children's activities.
Under the proposed tax credit, parents and guardians would be able to claim up to $500 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.
The tax credit would be refundable, unlike the federal Children's Fitness Tax Credit and similar tax credits in other provinces. Because the credit would be refundable, low-income parents who pay little or no income tax would benefit. The maximum amounts that may be claimed for the credit would rise annually with the cost of living through indexation.
Parents would be able to claim the tax credit on their annual income tax return, beginning with the 2010 tax year. Eligible expenses incurred on or after January 1, 2010 would qualify for the credit.
This new permanent tax credit would provide about $75 million each year to assist with the costs of enrolling children in extracurricular activities and would benefit over 1.8 million children in about 1.1 million Ontario families
The Ontario tax credit would cover activities that fall into two categories: fitness and non-fitness. Eligible activities must be supervised and suitable for children.
The criteria for fitness activities would be the same as for the federal Children's Fitness Tax Credit: the activities must require a significant amount of physical activity that contributes to cardio-respiratory endurance, plus one or more of muscular strength, muscular endurance, flexibility, and balance.
To be eligible, non-fitness activities must fall under one of the following categories:
Instruction in music, dramatic arts, dance and visual arts.
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.
This tax credit would not support programs that promote illegal activities.
EXAMPLES OF PROPOSED ELIGIBLE ACTIVITIES*
Activities Eligible for the Federal Tax Credit and Ontario's Tax Credit
Additional Organized or Instructional Activities Eligible for Ontario's Credit
Adapted fitness for youth with disabilities
Track and field
After-school extracurricular activities
Cooking for kids
Cardiopulmonary resuscitation (CPR)
Gardening for kids
Music composition and theory
Non-medical therapeutic activities for children with a disability
PROPOSED INELIGIBLE ACTIVITIES*
Other Ineligible Activities for which Other Tax Support is Provided
Activities offered free of charge.
Activities that promote illegal activity.
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.
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.
1) Subject to legislative approval.
2) 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.
3) The Canada Revenue Agency would make final determinations regarding the eligibility of particular activities, programs and expenses.
4) 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, and can be found at www.cra.gc.ca.
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.
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.