Make Your Child's Summer Break a Tax Break

As a busy working parent, you may be concerned about what activities are available for your kids this summer. There may be a solution that’s also a tax break: summer camp!

Using the Child and Dependent Care Credit, you can be reimbursed for part of the cost of enrolling your child in a day camp this summer.

Am I eligible?

1. You, and your spouse if you are married, must both be working.
2. Your child must be below age 13, your legal dependent, and live in your residence for more than half the year.

Tip: If your spouse doesn’t work but is either a full-time student, or is disabled and incapable of self-care, you can still qualify for the credit.

How much can I save?
You can claim a minimum credit of $600 for one child on up to $3,000 in expenses, or $1,200 for two or more children on up to $6,000 in expenses, if your adjusted gross income (AGI) is greater than $43,000. If your AGI is less than that, the credit per child scales up to $1,050 and $2,100, respectively.

What kind of camps?
The only rule is: no overnight camps.
The credit is designed to help working people care for their kids during the work day, so summer camps where kids stay overnight aren’t eligible for this credit.

Other than that, it doesn’t matter what kind of camp: soccer camp, chess camp, summer school or even a simple day care. All of them are eligible expenses for this credit.

Other ways to use this credit
While summer day camp costs are a common way to use this credit, any cost to provide care for your children while you are working may be eligible.

For example, if you pay a day care center, a housekeeper or a babysitter to take care of your child while you are working, that qualifies. You can even pay a relative to care for your child and claim the credit for that expense, as long as the relative isn’t your dependent, minor child or spouse.

This is just one of many possible tax breaks related to children and dependents. Call if you have questions about this credit, or if you’d like to discuss any other tax savings ideas.

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The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
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Mia Verc, CPA;  Janice Papais, CPA