Are you sending your kids to summer camp while you and your spouse work? Not only will your kids enjoy it, you will also when you see the potential tax break. If certain requirements are met, the cost of day camp qualifies for the Child and Dependent Care Credit.
How to take advantage of this summertime tax break
The Child and Dependent Care Credit may be claimed for the expense of caring for children under age 13, as long as you (and your spouse, if married) are "gainfully employed."
For taxpayers with an adjusted gross income (AGI) above $43,000, the credit equals 20 percent of the qualified expenses. This percentage applies to the first $3,000 of qualified expenses for one child and $6,000 for two or more children. For example, for a couple with an AGI of $150,000 and two young children, the maximum credit is $1,200.
Consider these rules if you're hoping to take advantage of the credit when your kids go off to summer camp:
Tax break alternative: If summer camp's not happening, you may consider having your child do some summer work at your business, thereby qualifying for other tax breaks.
Keep in mind that proper record keeping is essential. Make sure you obtain the camp's information (including official name, address and tax ID number) to use for your 2018 tax return.
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