CATC-Children Arts & Tax Credits Update

Please note the following changes to the CATC (Children Arts & Tax Credit) for 2016 and 2017. Read below:

Children’s Arts Tax Credit (CATC) To Be Phased Out The Children’s Arts Tax Credit (CATC) was introduced in 2011. With the 2016 Federal Budget, however, this tax credit is being phased out. The CATC, along with the Children’s Fitness Tax Credit, the National Child Benefit supplement, the Canada Child Tax Benefit, and the Universal Child Care Benefit are all being rolled together into one Canada Child Benefit. While it removes the direct incentive for parents to enroll their children in arts programs which is a little disappointing, it does benefit lower and middle class families better. It is estimated that nine out of ten families will receive more in child benefits than under the current system. As the provider of receipts for the CATC, here is what you need to know:

For 2016, provide a CATC receipt to your students for amounts paid in 2016 as usual. However, your students and parents should be aware that the maximum credit has dropped from $500 in 2015 to only $250 in 2016, unless the child is also eligible for the disability tax credit. Sample receipts continue to be available for download from the ARMTA Member’s Area.

For 2017, the credit will no longer be available, so you will not need to provide specific CATC receipts. If you find giving CATC receipts to be a chore, you can take comfort in knowing that this will be the last year that you need to provide them! For more information: The Canada Revenue Agency information for organizations providing CATC programs, including details on what information needs to be included on the CATC receipt (unchanged from 2015): http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns360-390/370/rgnztnseng.html. The 2016 Federal Budget which explains the new Canada Child Benefit in detail: http://www.budget.gc.ca/2016/docs/plan/ch1-en.html.

A summary of changes to the Children’s Fitness Credit and Children’s Arts Amount: https://turbotax.intuit.ca/tax-resources/dependant-tax-expenses/changes-to-childrens-credits-2016.jsp.