Bill 99 2010

An Act to amend the Taxation Act, 2007 to implement the children's activity tax credit

Note: This Act amends the Taxation Act, 2007.  For the legislative history of the Act, see the Table of Consolidated Public Statutes – Detailed Legislative History at www.e-Laws.gov.on.ca.

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

   1.  (1)  Subsection 23 (1) of the Taxation Act, 2007 is amended by adding the following paragraph:

  7.1  Subsection 103.1 (7) and clause 103.1 (9) (b).

   (2)  Subsection 23 (1.1) of the Act is amended by striking out "paragraphs 4, 6, 7 and 8 of subsection (1)" and substituting "paragraphs 4, 6, 7, 7.1 and 8 of subsection (1)".

   2.  (1)  Subsection 84 (1) of the Act is amended by adding the following paragraph:

  15.  A children's activity tax credit under section 103.1.

   (2)  Subsection 84 (3) of the Act is amended by striking out "paragraphs 1, 2, 3, 12, 13 and 14 of subsection (1)" in the portion before clause (a) and substituting "paragraphs 1, 2, 3, 12, 13, 14 and 15 of subsection (1)".

   3.  Part IV of the Act is amended by adding the following section:

Children's activity tax credit

Definitions

   103.1  (1)  In this section,

"eligible fitness expense" has the meaning assigned by subsection 118.03 (1) of the Federal Act; ("dépense admissible pour activités physiques")

"eligible program expense" means, in respect of a qualifying child of an individual for a taxation year, the amount of a fee paid to a qualifying entity (other than an amount paid to a person that is, at the time the amount is paid, the individual's spouse or common-law partner or another individual who is under 18 years of age) to the extent that the fee is attributable to the cost of registration or membership of the qualifying child in a qualifying program that is not an ineligible program and, for the purposes of this section, that cost,

  (a)  includes the cost to the qualifying entity of the program in respect of its administration, instruction, rental of required facilities, and uniforms and equipment that are not available to be acquired by a participant in the program for an amount less than their fair market value at the time, if any, they are so acquired, and

  (b)  does not include,

           (i)  the cost of accommodation, travel, food or beverages,

          (ii)  any amount that is an eligible fitness expense,

         (iii)  any amount deductible under,

                 (A)  section 63 of the Federal Act in computing any person's income for any taxation year, or

                 (B)  subsection 118.1 (3) or 127 (3) of the Federal Act in computing any person's tax for any taxation year, or

         (iv)  any amount that may be claimed by any person under subsection 102 (1) of this Act for any taxation year; ("dépense admissible au titre de programmes")

"ineligible activity" means an activity or type of activity prescribed by the Minister of Finance for the purposes of this section; ("activité exclue")

"ineligible program" means a program or type of program prescribed by the Minister of Finance for the purposes of this section; ("programme exclu")

"qualifying activity" means a supervised activity suitable for children, that is not an ineligible activity, that does not promote illegal activity and that involves one or more of the following:

    1.  Instruction in one or more of the following:

            i.  Music.

           ii.  Dramatic arts.

          iii.  Dance, if the instruction is not part of a program of physical activity prescribed for the purposes of the definition of "eligible fitness expense" in subsection 118.03 (1) of the Federal Act.

          iv.  Visual arts.

    2.  Language instruction.

    3.  Activities with a substantial focus on wilderness and the natural environment.

    4.  Activities with a substantial focus on helping children develop and use particular intellectual skills.

    5.  Structured interaction among children where supervisors teach or help children develop interpersonal skills.

    6.  Enrichment or tutoring in academic subjects; ("activité admissible")

"qualifying child" has the meaning assigned by subsection 118.03 (1) of the Federal Act. ("enfant admissible")

Qualifying entity

   (2)  For the purposes of the definition of "eligible program expense" in subsection (1), a qualifying entity is a person or partnership that offers one or more qualifying programs.

Qualifying program

   (3)  For the purposes of the definition of "eligible program expense" in subsection (1), a qualifying program is,

  (a)  a weekly program, that is not part of a school's curriculum, of a duration of eight or more consecutive weeks in which all or substantially all of the activities include a significant amount of qualifying activity;

  (b)  a program, that is not part of a school's curriculum, of a duration of five or more consecutive days of which more than 50 per cent of the daily activities include a significant amount of qualifying activity;

   (c)  a program, that is not part of a school's curriculum, of a duration of eight or more consecutive weeks, offered to children by a club, association or similar organization (in this section referred to as an "organization") in circumstances where a participant in the program may select amongst a variety of activities if,

           (i)  more than 50 per cent of those activities offered to children by the organization are activities that include a significant amount of qualifying activity, or

          (ii)  more than 50 per cent of the time scheduled for activities offered to children in the program is scheduled for activities that include a significant amount of qualifying activity; or

  (d)  a membership in an organization, that is not part of a school's curriculum, of a duration of eight or more consecutive weeks if more than 50 per cent of all the activities offered to children by the organization include a significant amount of qualifying activity.

Same, mixed-use facility

   (4)  For the purposes of the definition of "eligible program expense" in subsection (1), a qualifying program is that portion of a program, which program does not meet the requirements of clause (3) (c) and is not part of a school's curriculum, of a duration of eight or more consecutive weeks, offered to children by an organization in circumstances where a participant in the program may select amongst a variety of activities,

  (a)  that is the percentage of those activities offered to children by the organization that are activities that include a significant amount of qualifying activity; or

  (b)  that is the percentage of the time scheduled for activities in the program that is scheduled for activities that include a significant amount of qualifying activity.

Same, membership in organization

   (5)  For the purposes of the definition of "eligible program expense" in subsection (1), a qualifying program is that portion of a membership in an organization, which membership does not meet the requirements of clause (3) (d) and is not part of a school's curriculum, of a duration of eight or more consecutive weeks that is the percentage of all the activities offered to children by the organization that are activities that include a significant amount of qualifying activity.

Children's activity tax credit

   (6)  An individual who is resident in Ontario on the last day of a taxation year ending after December 31, 2009 may claim an amount for the year in respect of and not exceeding the amount of his or her children's activity tax credit for the year.

Amount of tax credit

   (7)  The amount of an individual's children's activity tax credit for a taxation year is equal to the amount calculated using the formula,

A  B

in which,

  "A"  is 10 per cent, and

  "B"  is the total of all amounts each of which is, in respect of a qualifying child of the individual for the taxation year, the lesser of $500 and the amount calculated using the formula,

C – D

in which,

         "C"  is the total of all amounts each of which is an amount paid in the taxation year by the individual, or by the individual's spouse or common-law partner, that is an eligible fitness expense or an eligible program expense in respect of the qualifying child of the individual, and

         "D"  is the total of all amounts that any person is or was entitled to receive, each of which relates to an amount included in computing the value of "C" in respect of the qualifying child that is the amount of a reimbursement, allowance or any other form of assistance, other than an amount that is included in computing the income for any taxation year of that person and that is not deductible in computing the taxable income of that person.

Amount of tax credit, child with a disability

   (8)  Despite subsection (7), an individual's children's activity tax credit in respect a qualifying child for a taxation year is the amount determined under subsection (9) if the following conditions are satisfied:

    1.  An amount is deductible in respect of the qualifying child under section 118.3 of the Federal Act in computing any person's tax payable under Part I of that Act for the taxation year.

    2.  The sum of the amounts referred to in the definition of "B" in subsection (7) in respect of the qualifying child of an individual is $100 or more.

Same

   (9)  For the purposes of subsection (8), an individual's children's activity tax credit in respect of a qualifying child for a taxation year is the sum of,

  (a)  the amount determined under subsection (7) in respect of the qualifying child for the taxation year; and

  (b)  the amount equal to $500 multiplied by 10 per cent.

Apportionment of tax credit

   (10)  If more than one individual is entitled to claim an amount under this section for a taxation year in respect of a qualifying child, the total of all amounts that may be claimed under this section in respect of the qualifying child shall not exceed the maximum amount that could be claimed for the year by any one of those individuals in respect of that qualifying child if that individual were the only individual entitled to claim an amount for the year under this section in respect of that qualifying child and, if the individuals cannot agree as to what portion of the amount each can claim, the Ontario Minister may fix the portions.

Bankruptcy

   (11)  Despite clause 84 (2) (b), an individual who becomes bankrupt in a calendar year is entitled to claim, for each taxation year that ends in the calendar year, only such amounts as the individual is entitled to claim for the taxation year under this section as can reasonably be considered wholly applicable to the taxation year, except that the sum of all amounts that may be claimed under this section for all taxation years of the individual ending in the calendar year shall not exceed the total amount that the individual would have been entitled to claim in respect of the calendar year if the individual had not become bankrupt.

Part-year residents

   (12)  An individual who is resident in Canada for only part of a taxation year is entitled to claim for the year only the amount the individual would be entitled to claim for the year under this section that can reasonably be considered wholly applicable to any period in the year throughout which the individual was resident in Canada, computed as though that period were the whole taxation year, except that the amount that may be claimed under this section shall not exceed the amount that the individual would have been entitled to claim under this section if the individual had been resident in Canada throughout the year.

Commencement

   4.  This Act comes into force on the day it receives Royal Assent.

Short title

   5.  The short title of this Act is the Children's Activity Tax Credit Act, 2010.

 

EXPLANATORY NOTE

This Explanatory Note was written as a reader's aid to Bill 99 and does not form part of the law.  Bill 99 has been enacted as Chapter 21 of the Statutes of Ontario, 2010.

 

The Bill amends the Taxation Act, 2007 to implement a children's activity tax credit.

The children's activity tax credit is set out in the new section 103.1 of the Act.  The credit is refundable and is based on amounts that are indexed under section 23 of the Act.  For taxation years ending after 2009, an individual is able to claim a credit in respect of expenses incurred in enrolling a qualifying child in a program of physical activity prescribed under the Income Tax Act (Canada) or a qualifying program.  The maximum credit for 2010 is $50 per qualifying child and an additional $50 per qualifying child with a disability.  The credit would be claimed in the tax return filed by the individual for the taxation year.  Consequential amendments are made to subsections 84 (1) and (3) of the Act.

 

Bill 99 2010

An Act to amend the Taxation Act, 2007 to implement the children's activity tax credit

Note: This Act amends the Taxation Act, 2007.  For the legislative history of the Act, see the Table of Consolidated Public Statutes – Detailed Legislative History at www.e-Laws.gov.on.ca.

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

   1.  (1)  Subsection 23 (1) of the Taxation Act, 2007 is amended by adding the following paragraph:

  7.1  Subsection 103.1 (7) and clause 103.1 (9) (b).

   (2)  Subsection 23 (1.1) of the Act is amended by striking out "paragraphs 4, 6, 7 and 8 of subsection (1)" and substituting "paragraphs 4, 6, 7, 7.1 and 8 of subsection (1)".

   2.  (1)  Subsection 84 (1) of the Act is amended by adding the following paragraph:

  15.  A children's activity tax credit under section 103.1.

   (2)  Subsection 84 (3) of the Act is amended by striking out "paragraphs 1, 2, 3, 12, 13 and 14 of subsection (1)" in the portion before clause (a) and substituting "paragraphs 1, 2, 3, 12, 13, 14 and 15 of subsection (1)".

   3.  Part IV of the Act is amended by adding the following section:

Children's activity tax credit

Definitions

   103.1  (1)  In this section,

"eligible fitness expense" has the meaning assigned by subsection 118.03 (1) of the Federal Act; ("dépense admissible pour activités physiques")

"eligible program expense" means, in respect of a qualifying child of an individual for a taxation year, the amount of a fee paid to a qualifying entity (other than an amount paid to a person that is, at the time the amount is paid, the individual's spouse or common-law partner or another individual who is under 18 years of age) to the extent that the fee is attributable to the cost of registration or membership of the qualifying child in a qualifying program that is not an ineligible program and, for the purposes of this section, that cost,

  (a)  includes the cost to the qualifying entity of the program in respect of its administration, instruction, rental of required facilities, and uniforms and equipment that are not available to be acquired by a participant in the program for an amount less than their fair market value at the time, if any, they are so acquired, and

  (b)  does not include,

           (i)  the cost of accommodation, travel, food or beverages,

          (ii)  any amount that is an eligible fitness expense,

         (iii)  any amount deductible under,

                 (A)  section 63 of the Federal Act in computing any person's income for any taxation year, or

                 (B)  subsection 118.1 (3) or 127 (3) of the Federal Act in computing any person's tax for any taxation year, or

         (iv)  any amount that may be claimed by any person under subsection 102 (1) of this Act for any taxation year; ("dépense admissible au titre de programmes")

"ineligible activity" means an activity or type of activity prescribed by the Minister of Finance for the purposes of this section; ("activité exclue")

"ineligible program" means a program or type of program prescribed by the Minister of Finance for the purposes of this section; ("programme exclu")

"qualifying activity" means a supervised activity suitable for children, that is not an ineligible activity, that does not promote illegal activity and that involves one or more of the following:

    1.  Instruction in one or more of the following:

            i.  Music.

           ii.  Dramatic arts.

          iii.  Dance, if the instruction is not part of a program of physical activity prescribed for the purposes of the definition of "eligible fitness expense" in subsection 118.03 (1) of the Federal Act.

          iv.  Visual arts.

    2.  Language instruction.

    3.  Activities with a substantial focus on wilderness and the natural environment.

    4.  Activities with a substantial focus on helping children develop and use particular intellectual skills.

    5.  Structured interaction among children where supervisors teach or help children develop interpersonal skills.

    6.  Enrichment or tutoring in academic subjects; ("activité admissible")

"qualifying child" has the meaning assigned by subsection 118.03 (1) of the Federal Act. ("enfant admissible")

Qualifying entity

   (2)  For the purposes of the definition of "eligible program expense" in subsection (1), a qualifying entity is a person or partnership that offers one or more qualifying programs.

Qualifying program

   (3)  For the purposes of the definition of "eligible program expense" in subsection (1), a qualifying program is,

  (a)  a weekly program, that is not part of a school's curriculum, of a duration of eight or more consecutive weeks in which all or substantially all of the activities include a significant amount of qualifying activity;

  (b)  a program, that is not part of a school's curriculum, of a duration of five or more consecutive days of which more than 50 per cent of the daily activities include a significant amount of qualifying activity;

   (c)  a program, that is not part of a school's curriculum, of a duration of eight or more consecutive weeks, offered to children by a club, association or similar organization (in this section referred to as an "organization") in circumstances where a participant in the program may select amongst a variety of activities if,

           (i)  more than 50 per cent of those activities offered to children by the organization are activities that include a significant amount of qualifying activity, or

          (ii)  more than 50 per cent of the time scheduled for activities offered to children in the program is scheduled for activities that include a significant amount of qualifying activity; or

  (d)  a membership in an organization, that is not part of a school's curriculum, of a duration of eight or more consecutive weeks if more than 50 per cent of all the activities offered to children by the organization include a significant amount of qualifying activity.

Same, mixed-use facility

   (4)  For the purposes of the definition of "eligible program expense" in subsection (1), a qualifying program is that portion of a program, which program does not meet the requirements of clause (3) (c) and is not part of a school's curriculum, of a duration of eight or more consecutive weeks, offered to children by an organization in circumstances where a participant in the program may select amongst a variety of activities,

  (a)  that is the percentage of those activities offered to children by the organization that are activities that include a significant amount of qualifying activity; or

  (b)  that is the percentage of the time scheduled for activities in the program that is scheduled for activities that include a significant amount of qualifying activity.

Same, membership in organization

   (5)  For the purposes of the definition of "eligible program expense" in subsection (1), a qualifying program is that portion of a membership in an organization, which membership does not meet the requirements of clause (3) (d) and is not part of a school's curriculum, of a duration of eight or more consecutive weeks that is the percentage of all the activities offered to children by the organization that are activities that include a significant amount of qualifying activity.

Children's activity tax credit

   (6)  An individual who is resident in Ontario on the last day of a taxation year ending after December 31, 2009 may claim an amount for the year in respect of and not exceeding the amount of his or her children's activity tax credit for the year.

Amount of tax credit

   (7)  The amount of an individual's children's activity tax credit for a taxation year is equal to the amount calculated using the formula,

A  B

in which,

  "A"  is 10 per cent, and

  "B"  is the total of all amounts each of which is, in respect of a qualifying child of the individual for the taxation year, the lesser of $500 and the amount calculated using the formula,

C – D

in which,

         "C"  is the total of all amounts each of which is an amount paid in the taxation year by the individual, or by the individual's spouse or common-law partner, that is an eligible fitness expense or an eligible program expense in respect of the qualifying child of the individual, and

         "D"  is the total of all amounts that any person is or was entitled to receive, each of which relates to an amount included in computing the value of "C" in respect of the qualifying child that is the amount of a reimbursement, allowance or any other form of assistance, other than an amount that is included in computing the income for any taxation year of that person and that is not deductible in computing the taxable income of that person.

Amount of tax credit, child with a disability

   (8)  Despite subsection (7), an individual's children's activity tax credit in respect a qualifying child for a taxation year is the amount determined under subsection (9) if the following conditions are satisfied:

    1.  An amount is deductible in respect of the qualifying child under section 118.3 of the Federal Act in computing any person's tax payable under Part I of that Act for the taxation year.

    2.  The sum of the amounts referred to in the definition of "B" in subsection (7) in respect of the qualifying child of an individual is $100 or more.

Same

   (9)  For the purposes of subsection (8), an individual's children's activity tax credit in respect of a qualifying child for a taxation year is the sum of,

  (a)  the amount determined under subsection (7) in respect of the qualifying child for the taxation year; and

  (b)  the amount equal to $500 multiplied by 10 per cent.

Apportionment of tax credit

   (10)  If more than one individual is entitled to claim an amount under this section for a taxation year in respect of a qualifying child, the total of all amounts that may be claimed under this section in respect of the qualifying child shall not exceed the maximum amount that could be claimed for the year by any one of those individuals in respect of that qualifying child if that individual were the only individual entitled to claim an amount for the year under this section in respect of that qualifying child and, if the individuals cannot agree as to what portion of the amount each can claim, the Ontario Minister may fix the portions.

Bankruptcy

   (11)  Despite clause 84 (2) (b), an individual who becomes bankrupt in a calendar year is entitled to claim, for each taxation year that ends in the calendar year, only such amounts as the individual is entitled to claim for the taxation year under this section as can reasonably be considered wholly applicable to the taxation year, except that the sum of all amounts that may be claimed under this section for all taxation years of the individual ending in the calendar year shall not exceed the total amount that the individual would have been entitled to claim in respect of the calendar year if the individual had not become bankrupt.

Part-year residents

   (12)  An individual who is resident in Canada for only part of a taxation year is entitled to claim for the year only the amount the individual would be entitled to claim for the year under this section that can reasonably be considered wholly applicable to any period in the year throughout which the individual was resident in Canada, computed as though that period were the whole taxation year, except that the amount that may be claimed under this section shall not exceed the amount that the individual would have been entitled to claim under this section if the individual had been resident in Canada throughout the year.

Commencement

   4.  This Act comes into force on the day it receives Royal Assent.

Short title

   5.  The short title of this Act is the Children's Activity Tax Credit Act, 2010.

 

EXPLANATORY NOTE

The Bill amends the Taxation Act, 2007 to implement a children's activity tax credit.

The children's activity tax credit is set out in the new section 103.1 of the Act.  The credit is refundable and is based on amounts that are indexed under section 23 of the Act.  For taxation years ending after 2009, an individual is able to claim a credit in respect of expenses incurred in enrolling a qualifying child in a program of physical activity prescribed under the Income Tax Act (Canada) or a qualifying program.  The maximum credit for 2010 is $50 per qualifying child and an additional $50 per qualifying child with a disability.  The credit would be claimed in the tax return filed by the individual for the taxation year.  Consequential amendments are made to subsections 84 (1) and (3) of the Act.