6 July 2009 External T.I. 2009-0325901E5 - Children's Fitness Tax Credit

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Whether children's swimming lessons held for 2 weeks, meeting five times per week, 45 minutes per lesson, qualify as a prescribed program of physical activity.

Position: Possibly.

Reasons: The legislation requires that the duration be five or more consecutive days but does not require a minimum daily duration time.

XXXXXXXXXX 						2009-032590
							Andrea Boyle
July 6, 2009

Dear XXXXXXXXXX :

Re: Children's Fitness Tax Credit

This is in response to your letter of March 26, 2009 in which you wish to draw our attention to what you believe may be a potential inequality regarding the eligibility of certain children's swimming lessons for the children's fitness tax credit (CFTC).

Specifically, you have expressed concern that the XXXXXXXXXX does not consider that a swimming course of two weeks, which meets for 45 minutes a lesson, five times per week, qualifies for the CFTC since it does not run for at least eight weeks and is not a "day camp."

Unless otherwise stated, all statutory references in this letter are references to the provisions of the Income Tax Act, R.S.C. 1985 (5th supp.) c. 1, as amended (the "Act").

The situation outlined in your letter relates to a factual one involving specific taxpayers. As explained in Information Circular 70-6R5, Advance Income Tax Rulings, it is not this Directorate's practice to comment on transactions involving specific taxpayers other than n the form of an advance income tax ruling. For situations involving completed ransactions, all relevant facts and documentation should be submitted to the appropriate tax services office for their views. However, we are prepared to offer the following general comments, which may be of assistance.

In general terms, the CFTC is based on the amount paid in the year, up to a maximum of $500, by an individual as an eligible fitness expense for his or her child who is under the age of 16 at the beginning of the year. The expression "eligible fitness expense" is defined in the Act as a fee attributable to the cost of the child's registration in a prescribed program of physical activity.

The Income Tax Regulations define a "prescribed program of physical activity" for the purpose of the CFTC to include, among other things, a program, that is not part of a school's curriculum, of a duration of five or more consecutive days of which more than 50% of the daily activities include a significant amount of physical activity. The legislation does not require a minimum daily duration time for the activities nor does it indicate that the program must be a "day camp."

In order to meet the "50% of the daily activities" requirement, the Canada Revenue Agency will consider the duration of all the daily activities provided under the particular program. Consequently, when a program is held on at least five consecutive days, during which the entire program involves a significant amount of physical activity, it is our view that such a program would be a prescribed program of physical activity and the fee attributable to the registration cost in such program would be eligible for the CFTC.

Therefore, it is our view that, providing that the program is held on at least five consecutive days during the two-week period, the registration cost of the two-week XXXXXXXXXX swimming course, which meets for 45 minutes a lesson, five times per week could qualify for the CFTC.

We trust these comments will be of assistance.

Yours truly,

Louise J. Roy, CGA
Manager
for Acting Director
Ontario Corporate Tax Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch