Dear Parent:

 It is with great excitement that we inform you that Ahmek and Wapomeo are eligible for the new Children’s Fitness Tax Credit!

Growing numbers of Canadian children are settling into a physically inactive life. The goal of the Children’s Fitness Tax Credit is to put money back into parents’ pockets while allowing children to maintain a healthy, active, and fun summer!

 To change the growing sedentary lifestyle the federal government has introduced the Children’s Fitness Tax Credit. The credit allows you to claim a maximum of $500 per year for fees paid for each child who is under 16 at any time during the year. As with most other non-refundable tax credits, it is calculated by multiplying the eligible amount by the lowest marginal tax rate (15.5% in 2007). Here is a practical example to show you how to calculate the amount that can be used to reduce your taxes/determine your expected return amount:

 Diana registered her three children (all of whom are under 16 years old) in an eligible program of physical activity and paid fees of $750 for each child on January 16, 2007. To calculate the amount that she can deduct from her taxes owing on her 2007 income tax return, she uses the following formula:

 STEP 1:

 $500                 (maximum allowable amount per child)

X   3                 (number of children enrolled in an eligible program)

$1,500              (total allowable amount eligible for the tax credit)

STEP 2:

 $1,500              (total allowable amount eligible for the tax credit)

X 15.5%            (lowest marginal tax rate for 2007)

$232.50             (total amount that can be used to reduce the taxes owing on Diana’s 2007 income tax return)

 As this year marks the first year that the Children’s Fitness Tax Credit is available it is important to understand what programs will be eligible when looking at payment dates and program start dates. Here is a written example to showcase what types of programs would and would not be eligible:

 Example:

Diana registered...

•         ...her daughter Julia in an eligible physical activity program and paid the eligible fees of $750 on August 30, 2006. This program started on September 15, 2006, and ended on April 21, 2007.

•         ...her son Colin in an eligible physical activity program and paid the eligible fees of $750 on December 20, 2006. This program started on January 6, 2007, and ended on April 28, 2007.

•         ...her daughter Lindsay in an eligible physical activity program and paid the eligible fees of $750 on January 2, 2007. This program started on January 6 and ended on April 28, 2007.

•         On her 2007 income tax return, Diana will only be allowed to claim the maximum amount of $500 for Lindsay’s program because the other two were paid in 2006.

 We hope that this information helps clarify any questions you may have about the new Children’s Fitness Tax Credit. The credit is a financial incentive to families.

We look forward to seeing your child at camp!

Sincerely,
The Taylor Statten Camps

For further information consult the Canadian Revenue Agency.
http://www.cra-arc.gc.ca/whatsnew/organi-e.html