I know, I know… the subjects of fun summer camp and “funless” income tax preparation don’t exactly go together . But for as painful as taxes might be, there is some value for anyone that sent a child to camp last summer, or is planning to in the coming months.
You might think the first order of business is to answer whether or not summer camp is tax deductible. But actually, it’s important to first distinguish between tax credit and tax deduction. Both are good, but a deduction reduces how much taxable income you claim, while a credit directly reduces the amount of tax owed. For your benefit, I’m going to focus on the credit opportunity, because let’s face it…these are dollar for dollar reductions.
So long story short, summer camp expenses might actually help you qualify for a tax credit. It’s the Child and Dependent Care Credit, and it’s available for expenses incurred during the summer (up to 35% for a qualifying child under the ages of 13).
Why does the credit exist? To help parents offset care expenses while they work (or look for work).
– Child & Dependent Care Credit –
If you paid expenses for the care of a qualifying individual while you worked or actively looked for work, you may be able to claim the credit. The credit itself is an amount as a percentage of total qualified expenses, paid to a care provider, for the care your child. That percentage depends on adjusted gross income.
1. DAY CAMP ONLY = There is a difference between day camp and overnight camp, and overnight camp expenses don’t qualify for the credit.
2. AGE = Children/dependents must be under 13 to qualify, or disabled and physically or mentally incapable of caring for themselves.
3. LIMIT = You can qualify for a credit of up to 35% of qualifying expenses. The credit gradually decreases as income increases.
4. MAXIMUM AMOUNTS = That’s 35% of qualifying expenses of $3K for one child; up to $6K for two or more.
* You (and spouse if filing jointly) must have earned income for the tax year.
Our Federal Tax ID for your TAX return is # 47-3895966
Please note: We specialize in technology camps, not tax preparation. We recommend that you speak with a tax professional before filing. The child and dependent care information above does not encompass any Flexible Spending Accounts your employer may have established at your company. Please check with your HR Department to find out if your company’s FSA plan covers day camps. Always consult a tax specialist.