Children’s fitness tax credit effective Jan. 1

If your children are participating in sports, such as gymnastics and karate, you may be entitled to a tax credit. Talk to your accountant.

Q :
Currently, We receive the $100 Universal Child Care Benefit (UCCB) for myyoungest child.


My two other children are nine and 12 years old. We cannot claim childcare expenses, as my wife is a stay-at-home mom. Was there another child-care deduction in the last budget?

This past Halloween and Canada Day, Finance Minister Jim Flaherty gave out early Christmas presents. In recent columns, I have covered most of the proposed and effective tax changes that affect individuals and families.

For individuals that missed my regular Metro Tuesday column, here are some of the tax highlights:

  • Employment expense credit: Effective July 1, 2006, all employed taxpayers may claim this $500 non-refundable tax credit in their 2006 income tax filings. This will increase to $1,000 in 2007.

  • Transit user tax credit: Effective July 1, 2006, all individuals can claim up to $1,200 non-refundable tax credit in 2006 tax return.

  • Universal Child Care Benefit (UCCB): Parents with children will receive $100 per child under six years old in addition to Child Tax Benefit (CTB). If you have not received your UCCB, call CRA and apply.

  • Income splitting: Starting in 2007, seniors may income split various forms of pension income

  • Age credit increase: Seniors age credit will increase from $4,066 to $5,066.

  • Increased dividend tax credit: Individuals that receive eligible dividends in 2006 will be taxed at a lower federal tax rate. Check with your tax advisor, as not all dividends are eligible at this lower rate.

  • Children’s fitness tax credit (CFTC): Parents may claim the cost of children’s recreation activities for up to a $500 non-refundable tax credit.

In your particular circumstance, you may not qualify for a child-care deduction but may claim a CFTC for some of the cost for recreational activities such as gymnastics, karate or dance. The purpose of the credit is to encourage physical activities, sport and fitness for young children. It appears our government has recognized the challenges and complexities with obesity and other health-related issues facing Canada.

The Children’s Fitness Tax Credit (CFTC) is effective Jan. 1, 2007, and families can claim up to $500. Although a somewhat positive attempt by the government to encourage parents to get kids physically involved, any parent knows $500 barely covers six months of any sporting activity. Let’s hope Mr. Flaherty lives in the real world and quickly increases the credit.

To qualify for the CFTC:

  • A child must be under 16 years old and enrolled in an eligible program.

  • The activity must be ongoing and contributes to a child’s cardio-respiratory endurance and at least one muscular strength, muscular endurance, flexibility or balance.

  • Children under 10 years old must be involved in a minimum of 30 minutes of sustained moderate to vigorous physical activity per visit.

  • For children over 10 years old but under 16, it is a minimum of 60 minutes of physical activity.

  • Fees must be paid to a qualifying entity for instruction, lessons, rental of facilities or equipment.

For updated information, visit Canada Revenue Agency’s website or call your accountant.

Henry Choo Chong, CGA provides accounting and tax services to individuals and businesses in the GTA. He can be reached at: 416-590-1728, ext. 304. Any questions to Money Matters should be e-mailed to

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