There are big changes coming for families who get the refundable Children’s Fitness Tax Credit, so use it before you lose it!
Back in 2014, Canadian families were treated to a non-refundable tax credit of up to $1,000 when they enrolled a child under the age of 16 in an eligible program of physical activity. This included programs that enhanced physical strength, balance and endurance. But it only helped families who had taxes payable.
Then, starting in the 2015 tax filing year, this credit became refundable. That meant that it provided direct benefits to families who had little or no taxable income. All that was required was the filing of a tax return to receive up to $150 back.
But now, with the March 22, 2016, budget comes a phase-out: Both the children’s fitness and arts tax credits will be phased out starting in the 2016 year. The refundable child fitness amount will remain for 2016 but will be reduced to a maximum of $500 from the current $1,000 maximum.
The children’s arts tax credit maximum claim will be reduced to $250 from $500; this credit is, however, non-refundable. Both will be eliminated in 2017. The supplemental claim for disabled children will remain at $500 in both cases for 2016.
Remember that the Children’s Fitness Tax Credit is found on Line 459 and may be claimed by either parent or split between them, as long as the total amount claimed does not exceed the allowable claim. Receipts must be retained in case of audit. Expenses that are not eligible include the purchase or rental of equipment for exclusive personal use, travel, meals and accommodation.
If you missed it, adjust your 2015 tax return to make the claim and collect your extra refund.