Are piano lessons tax deductible?
September not only brings the start of the school year but also heralds the beginning of extra-curricular activities, from hockey to swimming, chess club to music lessons. The fees for these activities can add up quickly, especially for parents with more than one kid enrolled in a variety of programs.
It’s therefore understandable why an Edmonton father found himself in Tax Court in mid-July battling the Canada Revenue Agency over whether the costs of his son’s piano lessons should be eligible for the post-secondary tuition tax credit, which he tried to claim on his tax returns for several years during the period from 2004 to 2009.
The evidence shows that for the tax years under review, the father attempted to claim between $2,200 and $2,900 spent on his son’s piano lessons as a tuition credit transferred to him from his son.
Under the Income Tax Act, to claim a credit for tuition fees, the tuition fees paid must be “in relation to a post secondary school level course taken at an education institution that provided courses at this level.”
At the hearing, the father stated that his son was taking private piano lessons, typically lasting one hour per week, at his piano teacher’s studio. His lessons were at the Grade 10 Piano level as established by the Royal Conservatory of Music.
The two main issues were whether the piano lessons were taken “at the post secondary school level” and whether the piano teacher’s piano studio was “an educational institution for the purposes of… the act.”
The CRA argued that an individual cannot be considered to be an educational institution for the purpose of the tuition tax credit. Furthermore, there was no evidence showing that the piano teacher’s studio was, in fact, “a school of music or an education institution and was organized and operated as such.”
The Judge denied the credit, concluding: “I do not think that one hour piano lesson per week is sufficient for the appellant’s son to be considered as being enrolled at a university, college or other educational institution providing courses at a post secondary level…I doubt that Parliament ever intended to allow tuition credits in a situation like this one in relation to tuition fees paid to a piano teacher providing private piano lessons from home.”
The silver lining for 2013 is that today, parents can get some tax relief for piano lessons and a variety of other extra-curricular activities as a result of the children’s arts tax credit, which was introduced federally for the 2011 tax year.
You can get a federal non-refundable income tax credit for up to $500 of eligible expenses paid in a tax year for any child who is under 16 (or under 18 if the child is eligible for the disability tax credit) at the beginning of the year. Federally, this credit is worth 15% up to the maximum of $75 (15% X $500).
British Columbia, Manitoba, Saskatchewan, Ontario and the Yukon also provide provincial credits for children’s arts activities.