In its 2006 budget, the Federal Government announced a new personal tax credit beginning in 2007 to encourage physical activity for children.

A parent will be allowed a credit of 15.5% of fees paid to organizations that provide eligible programs to a maximum $500 in fees per year for each child under the age of 16.

The claim can be made by either parent, or shared between them. But remember that the $500 maximum relates to the child, not the parent. That is, only $500 can be claimed per child regardless of how it is divided among the parents.

To be eligible, programs must meet specific criteria outlined by the government, and it will be up to each organization to determine if their programs are eligible. The government indicates that eligible programs will include hockey, soccer, karate, football, basketball, folk dancing, swimming, hiking, horseback riding, and many sailing activities.

Organizations providing the programs will issue tax receipts that will allow parents to make the claim.

The credit will be claimed in the year that the eligible fees are paid, regardless of when the activity takes place. As a result you may be able to time the payments to maximize your credit.

Please contact your accountant at Harvey, Lister & Webb Incorporated to discuss the possibilities.

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