Tax Tips: Children’s arts tax credit

Does your client enroll their children in cultural or recreational programs? If so, they should take a second look at the new credits they can receive before filing their return.

Parents whose children participate in paid artistic, cultural, recreational and developmental programs can now enjoy the same benefit as those parents who have children participating in paid programs of physical activity.

The children’s arts tax credit is a new non-refundable tax credit based on eligible expenses paid for the cost of registration or membership of children in a qualifying program.

Important facts to consider:

• You may be able to claim up to $500 per child for the fees paid in 2011 that relate 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.

• The child must have been under 16 years of age (or under 18 years of age if qualified for the disability tax credit) at the beginning of the year in which an eligible arts expense was paid.

• To qualify for this amount, a program must:

1. Be ongoing (it must last at least eight consecutive weeks or, in the case of children’s camps, five consecutive days);

2. Be supervised;

3. Be suitable for children.

• The program must also include a significant amount of activity that is intended to contribute to the development of creative skills or expertise, as well as to the ability to acquire and apply knowledge or improve dexterity or coordination in an artistic or cultural discipline (such as literary arts, visual arts, performing arts, music, media, languages, customs, and heritage);

• The program can also have a substantial focus on wilderness and the natural environment and help children develop and use particular intellectual skills, as well as include structured interaction among children, where supervisors teach or help children develop interpersonal skills or provide enrichment or tutoring in academic subjects.

Organizations are in the best position to determine if the programs they offer are eligible so make sure to get a receipt from organizations that provide art programs for which you paid to enroll your child.

More information on eligible programs and activities can be found at www.cra.gc.ca/artscredit.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.