The children’s fitness and art tax credits offset fees paid for children to take fitness classes, engage in organized sports, and learn about art. As of 2017, the Canada Revenue Agency has phased out the children’s fitness and arts credits. To justify the change, government officials said that few families were claiming the credits and that they weren’t encouraging children to be more active. Additionally, the program was perceived to help high-income families more than low-income families. To address that discrepancy, the government is throwing more funding behind the Canada Child Benefit.
If your clients are used to taking the children’s fitness or arts tax credits, you may want to talk with them about Canada Child Benefit. The CCB is not a tax credit; instead, it consists of monthly payments to families based on the income information on their tax returns. Remind your clients that they need to file tax returns to claim these benefits, and both spouses must file.
Some provinces also offer tax credits similar to the phased-out federal fitness and arts credit. For example, as of 2017, Manitoba offers a children’s arts and cultural activity tax credit worth up to $54. The credit is based on the cost of artistic, recreational, and developmental activities for children under the age of 16. For children under 16 and young adults under 25, the province also offers an additional credit for fitness expenses. This credit is also worth up to $54 or up to $108 for children with disabilities.
Occasionally, the government introduces or phases out all kinds of credits and deductions. To soften the blow for your clients at tax time, research alternative programs or credits than could help them.