Tax Breaks and Music Lessons: How Sweet the Sound

Tax Tips & Advice

Learning to play the piano or some sort of instrument is a rite of passage for many kids.  I remember making the weekly trek to my lessons and then hammering out the same tunes over and over again each day after school until I got them right.  At the time, it seemed like a drag (and I’m sure my parents thought so too, not only because of the expense, but because they had to listen to countless error-filled sonatas).  But now that I’m older, I’ve realized that having some sort of musical skill really is valuable. I take pride in the fact that I can read and play music.  It’s like learning another language.

This is why it’s great that there’s now more incentive for parents to keep those lessons going into the teen years and beyond.  While there are some additional parameters in Vancouver, a 2007 court ruling now allows students studying practical or theoretical subjects at a Grade 9 level or above in a recognized curriculum like the Royal Conservatory of Music to claim their lesson and examination fees. Students taking post-secondary courses may also transfer up to $5000 per year to a parent. A person owing federal and provincial income tax can save approximately one-fifth of the expense claimed.

So what if your budding pianist ditches the piano for a hockey puck before they can claim virtuoso status? Well at least while they are taking lessons you won’t be paying tax on them.  Music lessons hold tax exempt status.   Plus, different provinces have additional perks, such as Ontario’s Children’s Activity Tax Credit (CATC) that allows parents to claim up to $500 of eligible expenses per child.

As part of the next phase of Canada’s Economic Action Plan, the federal government has also recently introduced the Children’s Arts Tax Credit. The credit will be available for a wide range of activities that are currently not eligible for the Children’s Fitness Tax Credit – including music lessons.  More on that in another post on the new Children’s Arts Tax Credit !

So while music lessons may be hard on the ears, there are lots of incentives that make them a bit easier on the wallet.  Have you taken advantage of any of them yet?