Renfrew-Collingwood Income Tax Service
5288 Joyce Street V5R 6C9 Vancouver, BC, Canada

Children’s Arts Tax Credit The children’s arts credit allows parents with children under 16 years of age who participate in paid artistic, cultural, recreational and developmental programs to claim a new non-refundable tax credit based on eligible expenses of up to $500 per year per eligible child. Some examples of eligible programs or activities include those in the fields that contribute to the development of creative skills or expertise in an artistic or cultural activit...y, or where a child acquires and applies knowledge in the pursuit of artistic and cultural activities. Artistic and cultural activities include the literary arts, visual arts, performing arts, music, media, languages, customs, and heritage. An eligible program must be either a weekly program that is a minimum of eight consecutive weeks or a children's specialty camp that lasts a minimum of five consecutive days. The full cost of a child's membership in an organization will be eligible for this new credit if more than 50% of the activities offered by the organization include a significant amount of eligible activities. An additional $500 disability supplement amount may be claimed for a child who is under 18 years at the beginning of the year and is eligible for the Disability Tax Credit. Either parent may claim the credit or the credit can be shared. To prevent duplication, expenses already claimed under other credits (e.g. the Medical Expense Tax Credit) will not qualify. To substantiate your claim come tax time, request a receipt from the organization that provides the Arts program. As with many other credits, you are not required to actually submit the receipts with your return but you should retain any supporting documentation in case the CRA asks for copies at a later date to verify your claim.

Child Care Expenses You might be able to deduct your childcare expenses if they were incurred to enable you or a supporting person to earn employment or business income, attend a designated educational institution or a secondary school, or engage in grant research. Attendance at a designated educational institution or secondary school means attendance of at least one course that is at least three weeks long, for at least 10 hours per week (full time program) or 12 hours per m...onth (part time program). A supporting person includes your spouse, the parent of the child, or the person who claimed the child as a dependant. The supporting person must have lived with you at any time in the taxation year as well as at any time in the first 60 days of the following taxation year. An eligible child is defined as a child of the taxpayer or the taxpayer’s spouse, or a child dependent on the taxpayer or the taxpayer’s spouse and whose income for the year does not exceed the basic personal amount for the year. The child has to be under 16 years of age at some time in the year. However, the age limit does not apply if, during the year, the child is dependent on the taxpayer or the taxpayer’s spouse and has a mental or physical infirmity. The maximum deduction is $10,000 for each child qualifying for the disability tax credit, $7,000 for each other child age six or under at the end of the year, and $4,000 for each other child age seven to fifteen at any time in the year. The maximum total deduction may not exceed two-thirds of your earned income and the actual amount paid in the year for child care. The deduction can be claimed only by the lower income person unless the lower income spouse attends secondary or post-secondary school, is mentally or physically infirm, or for a period of at least two weeks was in a prison, hospital, or asylum. Childcare expenses can include day care, nursery school, day sports camp, lodging at a boarding school or camp, and certain babysitters. Complete Form T778, Calculation of Child Care Expenses Deduction, and file it with your income tax return

Children’s Fitness Amount If you have a child who was, at the beginning of 2013, under 16 years of age (or under 18 years of age and eligible for the disability tax credit), you might be eligible to claim the Children’s Fitness Tax Credit. This credit allows parents to claim up to $500 of eligible fitness expenses paid per year for each qualifying child. If a child qualifies for the disability tax credit and at least $100 in eligible fitness expenses have been paid for the ...child, an additional bonus amount of $500 can be added to the eligible fitness expenses actually incurred. The tax savings to you is calculated by multiplying the total eligible expenses paid by the lowest Federal and provincial marginal tax rates (15% federal rate and 5.06% BC provincial rate for 2013). To qualify, activities must be either a minimum of eight consecutive weeks long, or in the case of camps, five consecutive days in duration. In addition, the activity must be supervised, suitable for children and require a significant amount of physical activity. For further information on what activities are eligible please refer to the Canada Revenue Agency (CRA) website at: http://www.cra-arc.gc.ca//dd/lns360-390/365/prgrm-eng.html. To claim the tax credit you should request a receipt when registering your children for qualifying activities. The receipts do not need to be submitted with your tax return but should be retained for six years in case the CRA asks to see them. Note that qualifying expenses are to be claimed in the year the amount was paid, regardless of when the activity takes place. If your child has attended an activity that qualifies as both a childcare expense and a fitness activity you must first claim the amount as a child care expense. Any portion that cannot be used as a childcare expense can be then claimed as a children’s fitness amount.

First-Time Home Buyers’ Tax Credit If you acquire a qualifying home, you might qualify for a home buyers’ tax credit (HBTC), which is a non-refundable tax credit worth up to about $750. Generally, to be eligible for the HBTC, you, (or your spouse or common-law partner) must acquire a qualifying home and neither you nor your spouse or common-law partner can have owned and lived in another home in the year of purchase or in any of the four preceding calendar years. If you are ...a person with a disability or are buying a qualifying home for a related person with a disability, you may not need to be a first-time home buyer. However, the home must be acquired to enable the person with a disability to live in a more accessible dwelling or in an environment better suited to the personal needs and care of that person. A qualifying home is a housing unit located in Canada acquired after January 27, 2009 which can be an existing home or one that is being constructed. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings, all qualify. A share in a co-operative housing corporation that entitles you to possess and gives you an equity interest in a housing unit located in Canada can also qualify. However, a share that only provides you with a right to tenancy in the housing unit will not qualify. The home must be intended to be used as your principal place of residence, or the principal place of residence of the person with the disability, within one year after acquisition to qualify. Note that even though the eligibility conditions for the HBTC are similar to the Home Buyer’s Plan, they are not connected. Being eligible for the HBTC will not affect your participation in the Home Buyer’s Plan. Either you or your spouse or common-law partner can claim this non-refundable tax credit or you can share the credit. However, the total of both claims cannot exceed $750 and may be claimed in the year the qualifying home is acquired. References: 1. ITA 118.05, 118.05(3) 2. http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html#q1

The Canada Education Savings Grant The government of Canada adds to your savings in a Registered Education Savings Plan (RESP) with the Canadian Education Savings Grant (CESG). The CESG is a financial incentive for parents, family, and friends to save for a child’s education after high school. The grant is paid directly into the child’s RESP and will not be included in the annual and lifetime contribution limits for the beneficiary (child/grandchild). The lifetime limit for a...ny one beneficiary is $7,200. Lifetime RESP contributions are limited to $50,000 per beneficiary (child/grandchild). When more than the $50,000 RESP lifetime limit is contributed with respect to a beneficiary, a 1% per month penalty will be payable on the excess contribution. The government of Canada will contribute CESG grants equal to 20 per cent of the first $2,500 of annual contributions to an RESP (up to a maximum of $500 per year per beneficiary) for the benefit of children under 18 years of age. For missed years, there are carryforward provisions that allow you to catch up on missed CESGs by up to $500 per year in future years. In 2013, for lower and middle income families, the CESG rate on the first $500 of annual contributions is 40 per cent for families with income of $43,561 or less (CESG equals $200 on the first $500 of contributions), and 30 per cent for families with income between $43,561 and $87,123 (CESG equals $150 on the first $500 of contributions). If the beneficiary does not use the CESG for education, the principal amount of the CESG grants must be repaid to the government. You will not have to repay income earned on the CESG grants but the income will be taxed when the amounts are withdrawn. The CESG will only be available for a 16 or 17 year old if the RESP contributions (net of any withdrawals) made before the year the child turned 16 either totaled $2,000 or were at least $100 per year in any four previous years. Subscribers of separate RESP plans for their children are allowed to transfer amounts between individual RESPs for siblings, without incurring penalties and without triggering the repayment of CESGs, provided that the beneficiary of the plan receiving the transfer of assets had not attained 21 years of age when the plan was opened. Set up and make contributions to an RESP for your children to qualify for the CESG. Talk to you financial institution representatives or financial planner for more information.