Children's Fitness Tax Credit

Budget 2006 proposes to allow parents to claim a non-refundable tax credit
in respect of up to $500 in eligible fees for the enrollment of a child
under the age of sixteen years in an eligible program of physical activity.
The measure will apply to the 2007 and subsequent taxation years. The
credit will be calculated by reference to the lowest personal income tax
rate for the taxation year and can be claimed by either parent for eligible
fees incurred during the calendar year.

To be eligible for the credit, fees must be paid in respect of eligible
expenses in an eligible program of physical activity. Eligible expenses
will include those for the operation and administration of the program,
instruction, renting facilities, equipment used in common (e.g. team
jerseys provided for the season), referees and judges, and incidental
supplies (e.g., trophies). Expenses that will not be eligible include the
purchase or rental of equipment for exclusive personal use, travel, meals
and accommodation.

The government will establish a small group of experts in health and
physical fitness to advise it on the definition of an "eligible program of
physical activity" for the purposes of the credit. These consultations will
consider among other things whether the activity should include an element
of instruction or supervision, and the adaptation of the definition of an
eligible program for children with disabilities.

For the purposes of the consultation, a working definition of an eligible
program of physical activity is as follows: an ongoing program suitable for
children in which substantially all of the activities undertaken include a
significant amount of physical activity that contributes to one or more of
cardio-respiratory endurance, muscular strength, muscular endurance,
flexibility and balance.

Claims for the children's fitness tax credit will need to be supported by a
tax receipt that contains information sufficient for the Canada Revenue
Agency to monitor compliance. Similarly, organizations will be required to
keep relevant books and records.

To ensure that the same expenses are not claimed under both the children's
fitness tax credit and the child care expense deduction, an individual will
not be allowed to make a claim for a children's fitness tax credit in
respect of amounts for which any person has made a claim under the child
care expense deduction

Here is the link to the full budget
document:

http://www.fin.gc.ca/budget06/bp/bptoce.htm