Government Announces Amateur Athlete Incentives

by Tax Guy - Burlington Accountant on December 29, 2008 Print This Post Print This Post

The Minister of Finance announced today that he intends to introduce changes to the Income Tax Act aimed at increasing the number of amateur athletes who will be allowed to defer income from endorsements, prizes and other income.

“Excellence in amateur athletics, particularly at the elite levels, entails significant sacrifice by the athletes, many of whom delay careers to realize their dreams of representing Canada internationally,” said Minister Flaherty. “The Government of Canada recognizes that sport continues to be a defining part of Canada’s identity and is pleased to support Canada’s athletes. We are proud to recognize their sacrifice, encourage their success and ease their eventual integration into the workforce by deferring tax on income from their athletic endeavours.”

Currently amateur athletes may defer tax on funds that are required under international sport federation rules, to be held by an organization that  preserves the eligibility to compete at the amateur level.   Currently athletes are taxed on those funds when they are distributed to the athlete.  Most sports federations no longer have these requirements and the availability of the deferral is limited.

Under the proposal, a registered Canadian amateur athlete will be able to place income from endorsements, prizes or other income into a qualifying account that will not be subject to income tax when deposited but will be taxed when withdrawn.

The government intends to table the legislation at the next parliamentary session.

News Release: Government of Canada Rewards Sacrifice, Encourages Excellence by Broadening Amateur Athlete

About The Tax Guy...

Dean Paley CGA CFP is a Burlington accountant and financial planner who services individuals and business owners locally, nationally and internationally. Dean has appeared in the National Post, Toronto Star and Metro News.

To find out more, visit Dean's website Dean Paley CGA CFP or connect via Twitter @DeanPaleyCGACFP.

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