Children's Fitness Tax Credit

[AreWeThereYetMom]

Children's Fitness Tax Credit - Good deal on tax savings? I don’t care for it and here’s why …

The government introduced a non-refundable tax credit to let parents claim up to $500 in eligible fees for enrolling a child under 16 in an eligible physical activity program. It is scheduled to begin January 1, 2007. This tax credit will be available for your 2007 Canadian income taxes.
http://www.cra-arc.gc.ca/fitness/

The example is deceiving though… as it looks like a big tax credit should you have 3 kids.

So if I choose to enroll say one or 2 kids into a program, it only allows me a tax credit of $77 bucks per kid on the $500 limit using the 15.5% lowest marginal rate… Or say I pay $140 bucks up front for daughter to enroll in a summer program for that year, the allowed tax credit to reduce my taxes only calculates to $21.70 for one child… wow, that reduces my taxes !! not!! It probably wouldn’t even have an impact on monthly child tax credit either. Not to mention that the approved fitness programs are rumored to be pretty selective.

It’s become a huge pet peeve that sounds too good to be true. Another slam for the working 'stuck in the middle' class families - ripped by government taxes. Whew! that's my rant after reading how good it is supposed to be

[karen]

I think the whole idea is to get kids more active!

As stated on the website:
Eligible activities:
On December 19, 2006, the Department of Finance released information explaining what programs of physical activity will qualify. It indicated that in order to qualify for the tax credit a program must be:
ongoing (either a minimum of eight weeks duration with a minimum of one session per week or, in the case of children's camps, five consecutive days);
supervised;
suitable for children; and
substantially all of the activities must include a significant amount of physical activity that contributes to cardio-respiratory endurance plus one or more of: muscular strength, muscular endurance, flexibility, or balance.

My son is a pretty active guy, but for what I pay for his activities (soccer, basketball) it won't make a whole heck of alot of difference on my return as well. AND, he would be involved in those activities regardless if the government implemented the Children's Fitness Tax Credit or not

[Giggles]

I'm confused. What is the lowest marginal tax rate? How can the credit be worth up to $500 dollars per child if you have to multiply the $500 amount you can claim by th 15.5% lowest marginal tax rate?

[sanstang]

It is what is referred to as a "non refundable tax credit" and only a percentage is used to reduce your federal tax payable. Just like your basic personal amount, cpp and ei paid.