- Child Fitness Amount (Child Fitness Amount)

Child Fitness Amount

Subject: Child Fitness Amount
Number: 08-09
Date: 9/19/2008

The CRA website may refer to the new requirements but the 2008 guides probably cannot be changed.

The only thing worse than dealing with personal tax season is dealing with the CRA’s subsequent requests for additional information. Not only do these requests result in unbillable time, but they are viewed by many clients as the result of tax return preparation mistakes.

In many cases, however, the taxpayer has followed the CRA’s directions with respect to what information is to be submitted and is then informed, by form letter,that the amount will be denied unless certain new information is submitted. Often, the information would have been easier to collect when the original return was being prepared.

The CRA has new expectations (that it is applying to 2007 as well) as to what information it requires to allow a taxpayer’s claim for the Children’s Fitness Amount, that is worth about $100 of tax savings ($200 for a child under 18, with a disability).

Right now, the CRA’s guides only list the eligibility requirements and state that a taxpayer should keep receipts in case they are requested.

The following is an excerpt from the current information request letters that the CRA is sending, grammatical errors included, indicating part of the additional information they want:

“We require the following information to support your claim for children's fitness tax the credit:
- a copy of a Canadian birth certificate, Permanent Resident Card, Form IMM 1442, "Confirmation of Permanent Residence", or a Visiting Permit.”

According to the CRA, this information is being requested to prove the child’s age. If a taxpayer has made a Child Tax Benefit claim then proof of age may already be in the CRA’s files and request letters may not be sent.

As a result of discussions we have had with the CRA regarding the inefficiency of this initiative, we have been advised that the CRA website may refer to the new requirements but the 2008 guides probably cannot be changed.

You might want to make sure this additional information is obtained for 2008 and check the CRA’s website to see what else they come up with as tax season approaches.

TAX TIP OF THE WEEK is provided as a free service to clients and friends of the Tax Specialist Group member firms. The Tax Specialist Group is a national affiliation of firms who specialize in providing tax consulting services to other professionals, businesses and high net worth individuals on Canadian and international tax matters and tax disputes.

The material provided in Tax Tip of the Week is believed to be accurate and reliable as of the date it is written. Tax laws are complex and are subject to frequent change. Professional advice should always be sought before implementing any tax planning arrangements. Neither the Tax Specialist Group nor any member firm can accept any liability for the tax consequences that may result from acting based on the contents hereof.