As of 2011 budget the federal government of Canada had decided to impose a new non-refundable tax credit for children that are enrolled in to programs of artistic, cultural, recreational or developmental activities.
How much can I claim for each of my children?
The Children’s Art Tax Credit (CATC) allows you to claim expenses of $500 per child for each year. To be eligible to claim this about your child must be under the age of 16 years of age at the beginning of the year in which you pay for the activity, or under 18 years of age if the child is eligible for the disability tax credit. Also, if at least $100 in eligible expenses has been paid for a child for the disability tax credit, an additional amount of $500 can be claimed for that child.
How is the credit calculated?
The credit can be calculated by multiplying the lowest income tax rate of 15% by the eligible amount for each child.
What programs are eligible for the CATC?
Eligible Programs must meet the following criteria:
- Minimum eight consecutive weeks in which a minimum of 90% of the activates are eligible to the credit
- Minimum of five consecutive days in duration of which 50% of daily activates must be eligible to the credit
- Minimum eight consecutive weeks duration offered to children by a club, association or similar organization offering a variety of different activities when more than 50% of the activities offered are eligible activities or more than 50% of the time scheduled for activities offered to children is for activities that are eligible activities (if both 50% tests are not met, a prorated portion of the fees will be allowed, representing the percentage of eligible activities offered by the organization or the percentage of time scheduled for these activities by the organization)
- Programs that is part of a school curriculum will be ineligible
What are eligible activities?
Eligible activities will include an activity that:
- Contributes to the development of creative skills or expertise in artistic or cultural activities
- Provides a substantial focus on wilderness and the natural environment
- Helps children develop and use particular intellectual skills
- Includes structured interaction among children where supervisors teach or help children develop interpersonal skills
- Provides enrichment or tutoring in academic subjects.
What expenses are eligible for the CATC?
Eligible expenses are fees paid for the cost of registration or membership, which includes the costs of administration, instruction, and the rental of facilities or equipment.
What expenses are ineligible for the CATC?
Expenses that are not eligible for the CATC include:
- A fee paid for the costs that relate to travel, meals and accommodation
- A fee paid if the prescribed program is provided by a person who is under age 18 or a person who is the spouse or common-law partner of the parent making the claim for the credit at the time the payment is made
- An amount that is deductible in the computation of any person’s income for any year, such as a deduction for a childcare expense
- An amount that can be claimed for the Children’s Fitness Tax Credit by any person or an amount that is claimed for any other tax credit
Should I ask for a receipt?
You should receive, or ask for, a receipt from organizations that provide prescribed art programs for which you paid to have your child enrolled. The organizations will determine the part of the fee that qualifies for the CATC.
Chick here for more information on the Children’s Arts Tax Credit