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It's time to revisit the rules now that we are a year and a half into dealing with the Child Fitness Tax Credit.

This federal tax credit was introduced in 2007 to help parents offset their children's fitness activity costs. Either parent can claim up to $500 per child, per year for fitness expenses for a child up to age 16, or age 18 if the child also qualifies for the disability tax credit.

To qualify, the child must participate in a physical activity, which includes any supervised activity such as soccer, karate, hockey, swimming or hiking. It excludes activities where the child rides on or in a motorized vehicle, i.e., a snowmobile. Waterskiing and horseback riding are considered physical activities as are sailing, golf and bowling.

The $500 fitness claim nets you a tax refund of $75 per child - not a huge amount and therefore you would think this is a simple tax claim. Not so. Because there is a range of different categories of eligible programs, the claim quickly becomes complicated. The Canada Revenue Agency has been bombarded with questions raised by parents and fitness organizations. The following are a sampling of CRA's responses.

Fees paid to an association or club for membership lasting eight weeks or more where the program includes physical activity more than 50 per cent of the time qualifies. For example, Girl Guide (or Cubs or Scouts) fees qualify if the program lasts eight weeks or more and more than 50 per cent of the program involves physical activities.

Similar qualifying programs include those offered by gymnastics or ski clubs and baseball or hockey associations. Only the child's portion of the fees (which the organization has to determine) qualifies in the case of family membership.

Fees paid for a weekly program that lasts eight or more weeks, such as a kids' swim program at the community pool, qualify. The eight-week requirement is unfortunate because the various levels of Red Cross Kids Swim programs generally last two to four weeks and won't qualify.

Fees paid for kids' summer camps or sports camp (i.e., tennis camp) that last 5 days or more qualify as long as more than 50 per cent of the program involves physical activities. Qualifying fees can be paid to an association, municipality or a business. The CRA was asked if fees paid for a fitness camp lasting four days to prepare the players for the upcoming season qualifies - they don't because the duration was less than five days. Qualifying fitness credit fees can include more than just enrolment fees. The CRA stated the following expenses paid to an organization offering skating lessons from September to March qualify for the fitness credit - lesson enrolment fees, speed skates rental charge, mandatory affiliation fees and competition fees.

Qualifying fees must be supported by a tax receipt issued by the organization, which includes the following: name, address and an authorized signature of the organization, name of the program, amount/date received and eligible portion for the credit; name of the payor, child's name and year of birth. No signature is required if the receipt is computer generated and forwarded electronically to the payor.

Organizations that offer physical activity programs can check if their programs qualify for the child fitness tax credit by using the Children's Fitness Tax Credit Eligibility Checklist on the CRA website.

Andy Wong is a tax consultant at MacKay LLP, Chartered Accountants in Yellowknife. He can be reached at andrew-wong@yel.mackayllp.ca.