CHILDREN’S FITNESS CREDIT INCREASED

In September, the federal government announced that they will be doubling the amount of Children’s Fitness Tax Credit. The maximum credit has been $500 since it was first introduced in 2007. This maximum is being increased to $1,000 per child, starting with the 2014 taxation year.

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A taxpayer can save up to $150 of federal tax with this credit, up from the current maximum of $75.

The provincial government also provides a credit of $500, which provides a maximum provincial tax saving of $25.

The provincial government has not commented on whether they will match the federal increase. 2012 was they year the provincial credit was available, five years after the federal credit was introduced.

In a addition, the federal government will be making this credit refundable, starting in 2015. Previously, low income families may have been unable to use this credit, as non-refundable credits can only be used to reduce federal taxes to zero. If a taxpayer owed no tax prior to the credit, they would receive no benefit from it. Making this credit refundable will allow low income taxpayers to benefit from this credit.

The tax credit applies to children under 16, or under 18 if they are eligible for the disability amount.

There have been no changes to the type of activities that qualify for the credit.