Information for organizations providing prescribed programs of physical activity

Although the Canada Revenue Agency administers the children's fitness tax credit, organizations are in the best position to determine if the programs they offer qualify as prescribed programs of physical activity for the purposes of the credit. This page contains information that will help you determine whether the programs you offer meet the requirements for the tax credit, and will also help you calculate the amount of eligible fitness expenses.

Note

A receipt does not guarantee the eligibility of a program.

Prescribed programs of physical activity

An eligible fitness expense must be for the cost of registration or membership of an eligible child in a prescribed program of physical activity. Generally, such a program must:

  • be ongoing (last at least eight consecutive weeks or, in the case of children's camps, five consecutive days);
  • be supervised;
  • be suitable for children; and
  • require significant physical activity contributing to cardiorespiratory endurance, plus one or more of:
    ◦muscular strength,
    ◦muscular endurance,
    ◦flexibility, and/or
    ◦balance.

For more information on the activities that contribute to cardio-respiratory endurance, visit the Public Health Agency of Canada's Physical Activity Guides for children and youth.

Under the Income Tax Regulations, physical activity includes:

  • horseback riding; and
  • if the child is eligible for the disability tax credit, activities that result in movement and in an observable expenditure of energy in a recreational context.

If a child rides on, or in, a motorized vehicle as an essential part of an activity, that activity does not qualify as a physical activity for the children's fitness tax credit.

The Children's Fitness Tax Credit Eligibility Checklist will help you decide whether a particular program qualifies for the children's fitness tax credit. For more information about the criteria for prescribed programs of physical activity, see the Regulations.

In addition to obviously strenuous games like hockey and soccer, activities such as golf lessons, horse-back riding, sailing and bowling (as well as others that require a similar level of physical activity) are considered to be eligible for the credit. If the child is eligible for the disability tax credit, activities that result in movement and in an observable expenditure of energy in a recreational context.

The following activities do not qualify:

  • activities where riding in, or on, a motorized vehicle is an essential part of the activity;
  • self-directed (unsupervised) activities;
  • activities that are part of a regular school program; or
  • sports-academics programs.

Note

Fees charged for extra-curricular programs that take place in school are eligible.

Calculating the amount of eligible fitness expenses

To be eligible for the children's fitness tax credit, expenses must be for a child who, at the beginning of the year in which the expenses are paid, is under 16, or is under 18 and is eligible for the disability tax credit. The expenses must be for the cost of the child's registration or membership in a prescribed program of physical activity.

Note

It is not an organization's responsibility to determine whether a child is eligible for the disability tax credit. If a parent tells an organization that a child is eligible for the disability tax credit, this should be accepted. In determining the eligible fees for such a child, an organization needs to recognize that physical activity includes activities that result in movement and in an observable expenditure of energy in a recreational context.

Registration and membership fees include the costs of administration, instruction, and the rental of facilities. If part of the fees paid by parents is for accommodation, travel, food, or beverages (e.g., room and board at a fitness camp), then this part must be subtracted from the total registration and membership fee paid to the organization.

Example 1

You operate an away-from-home hockey camp for children. Parents pay an all-inclusive registration fee of $700 for the one-week camp. The camp provides hockey pucks and jerseys, which are shared during the camp but kept by the organization at week's end. Children must bring all other necessary equipment with them and parents are responsible for transporting the children to and from the camp. The $700 fee includes $200 for accommodation and $150 for meals.

The part of the fee that is eligible for the children's fitness tax credit is $350 ($700 - $200 - $150).

Is the cost of uniforms eligible for the children's fitness tax credit?

Part of a registration or membership fee may be for the cost of equipment or uniforms (e.g., hats, shirts, or shorts) that are provided for participants to use in the program. At the end of the program, the equipment or the uniforms normally have little or no resale value, in which case the part of the registration or membership fee for their cost is included in the eligible fees for this credit.

In other situations, in addition to paying registration or membership fees, parents will buy uniforms or equipment from third-party suppliers or through the organization offering the program. In these situations, the purchase price for the uniforms or equipment is not an eligible fitness expense.

Mixed-use facilities or programs

Providing that all other requirements are met (i.e., program is ongoing, supervised, and suitable for children as described under "Prescribed programs of physical activity" above), the full cost of a child's membership in an organization (including a club, association, or similar organization) will be eligible for the credit if more than 50% of the activities offered to children by the organization include a significant amount of physical activity.

If the 50% test is not met, a receipt can be issued for a prorated amount, which will represent the percentage of activities offered to children by the organization that include a significant amount of physical activity.

Note

If your organization provides family memberships, the part of the cost that is for the child's participation in a prescribed program of physical activity may be eligible for the tax credit.

In circumstances where the participant in the program can select from among various activities, the full cost of a child's registration in a program offered by a club, association, or similar organization will be eligible for the credit if (in addition to being ongoing, supervised, and suitable for children):

  • more than 50% of the activities offered to children include a significant amount of physical activity; or
  • more than 50% of the available program time is devoted to activities that include a significant amount of physical activity.

If neither of these 50% tests is met, a receipt can be issued for a prorated amount, which will represent the percentage of activities offered to children by the organization that include a significant amount of physical activity, or the percentage of program time that is devoted to such activities.

Example 2 - Membership

A child's annual membership at the local health club entitles him or her to participate in various activities. If more than 50% of these activities include a significant amount of physical activity, a receipt can be issued for the membership fee. If this 50% test is not met, a receipt can be issued for a prorated amount, based on the percentage of the activities offered to children that include a significant amount of physical activity.

Example 3 - Program registration

You organize a program offered by a local boys and girls club which entitles a child to participate in a wide range of activities, some of which include a significant amount of physical activity (e.g., biking club, weekend hip hop dances, open swim or gym, ski club) and some of which do not (e.g., career planning, board games, reading club). A receipt for the full amount of the program registration cost can be issued if more than 50% of the available activities include a significant amount of physical activity, or if more than half of the club's scheduled time (i.e., total program hours) is devoted to activities that include a significant amount of physical activity.

If neither of these 50% tests is met, a receipt can be issued for a prorated amount. That amount can be based on either the percentage of the activities offered to children by the organization that include a significant amount of physical activity, or on the percentage of the time spent on activities that include a significant amount of physical activity. For example, if 20% of the activities that are offered include a significant amount of physical activity, but 30% of the available program time is devoted to these activities, a receipt can be issued for 30% of the program registration cost.

If the activity includes two distinct programs and one program is eligible for the children's fitness amount and the other program is eligible for the children's arts amount, two receipts, or only one that clearly shows the amounts paid to the organization for each distinct program, should be issued.

Example 4 - Two distinct programs

You operate a dance studio that also offers singing lessons. The dance program is eligible for the children's fitness tax credit and the singing program is eligible for the children's arts amount. Two receipts should be issued, one for each distinct program, or one receipt can be issued clearly showing the amount paid for each separate program.

Issuing receipts

You should issue a receipt for income tax purposes representing the amount of eligible fitness expenses paid in the calendar year. A receipt for amounts paid in 2013 should be issued for 2013 even if the activity takes place in 2014. A receipt should contain the following information:

  • organization's name and address
  • name of the eligible program or activity
  • amount received, date received, amount that is eligible for the children's fitness tax credit (eligible fees)
  • full name of the payer
  • full name of the child, and the child's year of birth
  • authorized signature

Note

An authorized signature is not required for electronically generated receipts.

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