When filing your taxes, there are numerous personal tax credits available that will help you offset the federal (and sometimes provincial) taxes owing on your tax return. We previously discussed how tax credits affect your balance owing. In this posting we will be providing you with some relevant information about a few of these tax credits.

Please note that technical data below has been taken from the Canada Revenue Agency Website at the following link:

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/menu-eng.html

Children’s fitness amount

You can claim to a maximum of $500 per child the fees paid in 2012 relating to the cost of registration or membership for your or your spouse’s or common-law partner’s child in a prescribed program of physical activity. 

Eligibility

The child must have been under 16 years of age or under 18 years of age if eligible for thedisability amount at the beginning of the year in which an eligible fitness expense was paid.

Children with disabilities – If the child qualifies for the disability amount and is under 18 years of age at the beginning of the year, an additional amount of $500 can be claimed as long as a minimum of $100 is paid on registration or membership fees for a prescribed program of physical activity.

Notes
You may have paid an amount that would qualify to be claimed as child care expenses and the children’s fitness amount. If this is the case, you must first claim this amount as child care expenses. Any unused part can be claimed for the children’s fitness amount as long as the requirements are met.

If an expense is eligible for the children’s fitness amount, it is not eligible for thechildren’s arts amount.

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

Example
Mary registered her daughter Julie (9 years old) in a prescribed program of physical activity and paid fees of $750 on August 30, 2012. The program started on September 15, 2012, and ended on April 21, 2013.

Mary’s husband registered their son Eric (17 years old and eligible for the disability tax credit) in a prescribed program of physical activity and paid fees of $400 on December 20, 2012. The program started on January 6, 2013, and ended on April 28, 2013. He also registered their daughter Samantha (10 years old) in a prescribed program of physical activity and paid fees of $600 on January 2, 2013. The program started on January 6 and ended on April 28, 2013.

On her 2012 income tax return, Mary can claim a total amount of $1,400 (if her husband is not claiming any amount) based on the following formula:

• Julie $500 (maximum allowable expenses per child)
• Eric $400 (paid fees) plus $500 (since he is eligible for the disability tax credit and at least $100 was paid for eligible fitness expenses for him)
• She can not claim an amount for Samantha because the fees were paid in 2013.

Prescribed program

To qualify for this amount, a program must:

• be ongoing (a minimum of eight consecutive weeks duration or, in the case of children’s camps, five consecutive days);
• be supervised;
• be suitable for children; and
• require significant physical activity that contributes to cardiorespiratory endurance,plus one or more of:
  • muscular strength,
  • muscular endurance,
  • flexibility, and/or
  • balance.

Physical activity includes strenuous games like hockey or soccer, activities such as golf lessons, horse-back riding, sailing and bowling as well as others that require a similar level of physical activity.

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.

Note
For a child who qualifies for the disability amount, the requirement for significant physical activity is met if the activities result in movement and in an observable use 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.

Fees paid by parents for accommodation, travel, food, or beverages (e.g. room and board at a fitness camp) do not qualify.

Completing your tax return

Enter on line 365 of Schedule 1, Federal Tax, the total amount of allowable expenses paid for each eligible child (maximum of $500 per child).

Enter an additional amount of $500 per child for each eligible child who qualifies for the disability amount and for who you have paid a minimum of $100 in allowable expenses.

You can claim this amount as long as another person has not already claimed the same fees and the total claimed is not more than the maximum amount that would be allowed if only one of you were claiming the amount.

Reimbursement of an eligible expense – You can only claim the part of the amount for which you have not been or will not be reimbursed. However, you can claim the full amount if the reimbursement is reported as income, (such as a benefit shown on a T4 slip), and you did not deduct the reimbursement anywhere else on your return.

Supporting documents

Filing electronically or a paper return
Keep all your documents in case we ask to see them at a later date.

Notes
You should receive, or ask for, a receipt from organizations that provide prescribed programs of physical activity for which you paid to have your child enrolled. The organizations will determine the part of the fee that qualifies for the children’s fitness amount.

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

It is not an organization’s responsibility to determine whether or not a child is eligible for the disability amount. If you tell an organization that a child is eligible for the disability amount, the organization should issue a receipt accordingly.

Children’s arts amount

You can claim to a maximum of $500 per child the fees paid in 2012 relating to the cost of registration or membership of your or your spouse’s or common-law partner’s child in a prescribed program of artistic, cultural, recreational, or developmental activity.

Eligibility

The child must have been under 16 years of age (or under 18 years of age if eligible for thedisability amount) at the beginning of the year in which an eligible expense was paid.

You can claim this amount as long as another person has not already claimed the same fees and the total claimed is not more than the maximum amount that would be allowed if only one of you were claiming the amount.

Children with disabilities – If the child qualifies for the disability amount and is under 18 years of age at the beginning of the year, an additional amount of $500 can be claimed as long as a minimum of $100 is paid for registration or membership fees for aprescribed program.

NotesEligible expenses do not include amounts that can be claimed as the federal children’s fitness amount or as a deduction by any individual, such as the child care expenses deduction (line 214). As well, eligible expenses do not include amounts that have been claimed as a tax credit by any individual.

Programs that are part of a school curriculum are not eligible.

Prescribed program

To qualify for this amount, a program must:

• be ongoing (a minimum of eight consecutive weeks duration, or in the case of children’s camps, five consecutive days);
• be supervised; and
• be suitable for children.

The program also has to meet at least one of the following criteria:

• it contributes to the development of creative skills or expertise in an artistic or cultural activity;
• it provides a substantial focus on wilderness and the natural environment;
• it helps children develop and use particular intellectual skills;
• it includes structured interaction among children where supervisors teach or help children develop interpersonal skills; or
• it provides enrichment or tutoring in academic subjects.

Note
An activity that develops creative skills or expertise is only eligible if it is intended to improve a child’s dexterity or co-ordination, or helps in acquiring and applying knowledge through artistic or cultural activities such as literary arts, visual arts, performing arts, music, media, languages, customs, and heritage.

Completing your tax return

Enter on line 370 of Schedule 1, Federal Tax, the total amount of allowable expenses paid for each eligible child (maximum of $500 per child).

Enter an additional amount of $500 per child for each eligible child who qualifies for the disability amount and for whom you have paid a minimum of $100 in allowable expenses.

You can claim this amount provided another person has not already claimed the same fees and the total claimed is not more than the maximum amount that would be allowed if only one of you were claiming the amount.

Reimbursement of an eligible expense – You can only claim the part of the amount for which you have not been or will not be reimbursed. However, you can claim the full amount if the reimbursement is reported as income (such as a benefit shown on a T4 slip), and you did not deduct the reimbursement anywhere else on your return.

Supporting documents

Filing electronically or filing a paper return
Do not send any documents. Keep them in case we ask to see them at a later date.

You should receive, or ask for, a receipt from organizations that provide prescribed programs for which you paid to have your child enrolled. The organizations will determine the part of the fee that qualifies for the children’s arts amount.

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

Home buyers’ amount

You can claim an amount of $5,000 for the purchase of a qualifying home made in 2012, if both of the following apply:

• you or your spouse or common-law partner acquired a qualifying home; and
• you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years (first-time home buyer).

Qualifying home

A qualifying home must be registered in your and/or your spouse’s or common-law partner’s name in accordance with the applicable land registration system, and must be located in Canada. It includes existing homes and homes under construction.

The following are considered qualifying homes:

• single-family houses;
• semi-detached houses;
• townhouses;
• mobile homes;
• condominium units; and
• apartments in duplexes, triplexes, fourplexes, or apartment buildings.

Note
A share in a co-operative housing corporation that entitles you to own and gives you an equity interest in a housing unit located in Canada also qualifies. However, a share that only gives you the right to tenancy in the housing unit does not qualify.

Persons with disabilities

You do not have to be a first-time home buyer if:

• you are eligible for the disability amount; or
• you acquired the home for the benefit of a related person who is eligible for the disability amount.

Note
The purchase must be made to allow the person eligible for the disability amount to live in a home that is more accessible or better suited to the needs of that person.For the purposes of the home buyers’ amount, a person with a disability is an individual who is eligible to claim a disability amount for the year in which the home is acquired, or would be eligible to claim a disability amount, if we do not take into account that costs for attendant care or care in a nursing home were claimed as medical expenses on lines 330 or 331.

You must intend to occupy the home or you must intend that the related person with a disability occupy the home as a principal place of residence no later than one year after it is acquired.

Completing your tax return

Enter $5,000 on line 369 of your Schedule 1, Federal Tax.

The claim can be split between you and your spouse or common-law partner, but the combined total cannot exceed $5,000.

When more than one individual is entitled to the amount (for example, when two people jointly buy a home), the total of all amounts claimed cannot exceed $5,000.

Supporting documents

Filing electronically or a paper return
Keep all your documents in case we ask to see them at a later date.

Adoption expenses

As a parent, you can claim an amount for eligible adoption expenses related to the adoption of a child who is under 18 years of age. The maximum claim for each child is $11,440. You can claim these incurred expenses in the tax year including the end of the adoption period in respect of the child.

Are your expenses eligible?

Eligible adoption expenses you can claim are:

• fees paid to an adoption agency licensed by a provincial or territorial government (an “adoption agency”);
• court costs and legal and administrative expenses related to an adoption order in respect of the child;
• reasonable and necessary travel and living expenses of the child and the adoptive parents;
• document translation fees;
• mandatory fees paid to a foreign institution;
• mandatory expenses paid in respect of the immigration of that child; and
• any other reasonable expenses related to the adoption required by a provincial or territorial government or an adoption agency.

Did your expenses happen during the adoption period?

The adoption period:

• begins at the earlier of:
  • the time the eligible child’s adoption file is opened with a provincial or territorial ministry responsible for adoption (or with an adoption agency licensed by a provincial or territorial government); and
  • the time, if any, an application related to the adoption is made to a Canadian court; and
• ends at the later of:
  • the time an adoption order is issued by, or recognized by, a government in Canada in respect of that child; and
  • the time the child first begins to reside permanently with you.

Completing your tax return

On line 313 of your Schedule 1, Federal Tax, enter the amount of eligible adoption expenses related to the adoption of a child who is under 18 years of age. The maximum claim for each child is $11,440.

Notes
The two adoptive parents can split the eligible expenses as long as the total combined claim for eligible expenses for each child is not more than the amount before the split.

Parents can claim these incurred expenses in the tax year including the end of theadoption period in respect of the child.

Reimbursement of an eligible expense – You must reduce your eligible expenses by any reimbursements or other forms of assistance you received.

Supporting documents

Filing electronically or filing a paper return
Keep all your documents in case we ask to see them at a later date.

If, at the end of the year, you reside in Newfoundland and Labrador, Ontario, Manitoba,Alberta, British Columbia, or Yukon, be sure also to claim the corresponding provincial or territorial non-refundable tax credit to which you are entitled, on line 5833 of your provincial or territorial Form 428.

If you would like more information on the above we would gladly be able to assist you with your needs.