Is Summer Camp Eligible for the Child & Dependent Care Tax Credit?

July 6, 2011 | By: TaxCure Staff

summer camp tax creditFor most parents who have children 13 or younger, summer camp is usually something for them to do during the summer months when school is out. The cost of summer camp though can sometimes be expensive, especially with this lackluster economy.

Fortunately, summer camp expenses may qualify as eligible expenses under the Child and Dependent Care Tax Credit.

The IRS recently released a few tips to help parents or taxpayers with children understand the circumstances in which summer daycare expenses qualify for the Child and Dependent Care Tax Credit. It is always a good idea for taxpayers to have as much information on tax credits as there are general eligibility requirements for the amount of the tax credit and so forth. Here are a few tips:

  • Overnight camps or summer camps in which children live away from home will not qualify
  • At-home daycare providers (cannot pay dependent) may still qualify for the credit
  • You may receive up to 35% back for qualifying expenses, limited by your income/job status
  • The expense limit (not reimbursed) is $3k for one qualifying individual and $6k for two or more
  • To qualify, you should be incurring daycare expenses to work or look for work

Other Details and Qualifications

  • If you are having someone come to your home and take care of your children, you may have to pay employment taxes, so it is always a good idea to check with your accountant.
  • If your employer is paying all or part for your child’s daycare or summer camp expenses, you may be able to not include these benefits as income.
  •  If you are paying for your child’s summer day camp, be sure to have their name, address, and taxpayer identification number as you will need this information to claim the tax credit.
  • Once a taxpayer has adjusted gross income of $43,000 or more, only 20% of expenses would apply regarding the tax credit (Line 38 on Form 1040, Line 22 on 1040A, or Line 37 on 1040N)

Just like many tax credits and deductions, there are many details a taxpayer must understand to legally claim a tax credit or deduction. When in doubt, consult with the IRS, CPA, a tax accountant, or a tax preparer to make sure that you are following all IRS rules and regulations correctly. For more information on the Child and Dependent Care Tax Credit, see IRS publication 503.