Ontario passes Child Activity Tax Credit

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Karl Wagner
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Ontario passes Child Activity Tax Credit

Post by Karl Wagner » Thu Dec 09, 2010 11:00 am

With the new, permanent Children's Activity Tax Credit, parents will now be able to receive a refundable tax credit of up to $50 per child under the age of 16 and up to $100 per child with a disability under the age of 18 for enrolling their children in activities that encourage them to be healthy and active.
According to the Press release, parents can claim up to $500 in expenses and receive a $50 refundable tax credit. Eligible expenses include a broader range than the Federal Child Fitness Tax Credit; including registration and membership fees, as well as fees paid to cover the cost of uniforms, equipment used in common, renting facilities, referees, judges, incidental supplies (e.g., trophies), administration and instruction. Expenses are retroactive to January 1, 2010.

Does anybody know what the impact of this is on record keeping and reporting requirements for Groups? When can we expect an information package for registrars, leaders and parents? It would be great to have answers before tax season rolls around.
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scouterjohn
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Re: Ontario passes Child Activity Tax Credit

Post by scouterjohn » Thu Dec 09, 2010 12:45 pm

And wouldn't it be great if the membership management system could be used by the group registrar to print a set of tax receipts for each youth. All the information is there except the amount but that could be entered once when requesting the receipts since it is probably the same for each youth.

Same thing for the membership cards.

ayates
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Re: Ontario passes Child Activity Tax Credit

Post by ayates » Thu Dec 09, 2010 2:12 pm

Actually the amount of the tax receipt may be more than just the registration fee. Notwithstanding this new tax credit the references uniforms/etc, even with the existing federal tax credit there does not appear to be a consensus on which parts of the program, other than the registration fee, can be claimed. Some people say dues and camping fees, others say just a portion of the camp fees, others say only for long camps. Our "policy" is that we will write a receipt for everything the parent has paid, and it is up to them to decide what portion they can claim. With both provincial and federal policies there will never be the same rules for everyone in Canada.

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Karl Wagner
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Re: Ontario passes Child Activity Tax Credit

Post by Karl Wagner » Thu Dec 09, 2010 2:46 pm

For the CFTC, the CRA gives examples on their website. The onus is on the organization providing the receipt to specify the eligible amount.
Example
You operate an away-from-home hockey camp for children. Parents pay an all-inclusive registration fee of $700 for the one-week camp. The camp provides hockey pucks and jerseys, which are shared during the camp but kept by the organization at week's end. Children must bring all other necessary equipment with them and parents are responsible for transporting the children to and from the camp. The $700 fee includes $200 for accommodation and $150 for meals.
The part of the fee that is eligible for the children's fitness tax credit is $350 ($700 - $200 - $150).

...

Issuing receipts
You should issue a receipt for income tax purposes representing the amount of eligible fitness expenses paid in the calendar year. A receipt for amounts paid in 2007 should be issued for 2007 even if the activity takes place in 2008. A receipt should contain the following information:
  • organization's name and address
  • name of the eligible program or activity
  • amount received, date received, amount that is eligible for the children's fitness tax credit (eligible fees)
  • full name of the payer
  • full name of the child, and the child's year of birth
  • authorized signature
However, my concern is not with Alan's interpretation: rather, it is the absence of Scouts Canada's guidance and training of the membership, leaving it up to individual groups to interpret as they see fit. When I ask for guidance, I am expecting informed opinion from somebody knowledgeable about the applicable federal and provincial regulations. We should not have to become tax lawyers in order to deliver program, nor should my lay interpretation of the rules trump Alan's.

For CRTC, it would be great if National provided a clear and concise set of rules for issuing receipts, and a simple, easy-to-use bookkeeping system for reporting on receipts issued. For this new tax credit, the guidance should come from one of the provincial offices and reuse, where possible, whatever National has provided.
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scouterjohn
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Re: Ontario passes Child Activity Tax Credit

Post by scouterjohn » Thu Dec 09, 2010 8:35 pm

In past years we have issued receipts for the entire amount of the registration fee since it all goes out the door as soon as we collect it -- to pay National, Council and the School Board. We also create receipts for the program portion of our summer week-long Scout camp. This is easy when we go to Haliburton or similar and bring our own food as we just use the per youth program fee charged by the camp. But it would be nice to have an official opinion from a tax expert.

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