5 Ways to Make Summer Camp Tax Deductible

The Child and Dependent Care Credit offered by the Internal Revenue Service (IRS) allows families to claim up to 35% of qualified expenses up to $3,000 for a child or dependent and up to $6,000 for two or more children or dependents. This can be very helpful when schools close, although you will have to wait until tax time to get the money back. Many families struggle to find child care for their children during work hours. Summer camps are a great option, but the price can be high.

According to the American Camp Association, ACA-accredited camp fees can cost less than $100 up to $1,500 per week. “Child care is expensive, and the cost makes many parents wonder if it's worth returning to the workforce,” says Matt Becker, financial planner and founder of the blog. Money from mom and dad. “But the child and dependent care credit can make it a little easier for parents to continue working without putting too much strain on their budget.”

Of course, there are rules that determine what is deductible and what is not. Here are six factors to consider to ensure your child's summer camp experience qualifies.

Key takeaways

  • The Child and Dependent Care Credit can help cover child care costs.
  • Summer camp fees may qualify for a tax benefit under the Child and Dependent Care Credit.
  • The credit is limited to $3,000 for a single dependent child or $6,000 for two or more children in a given year.
  • Several restrictions apply to claiming the tax credit, including the professional situation of the parents and the age of the child(ren).
  • You can only claim the cost of the camp and it must be a day camp. Overnight camps are not eligible.

1. Have earned income

Parents or guardians must have earned income reported to the IRS. You will not qualify for the credit if you are a stay-at-home dad and your wife works full-time or vice versa. If only one parent is employed, the other must actively seek work.

The custodial parent generally has the right to claim the credit if you are divorced, although some divorce settlements and decrees may handle this differently. The parent claiming this summer camp credit must be working or actively seeking work. Check with your attorney and/or tax professional to ensure you are in compliance.

Here are some other important factors to consider to qualify for the credit:

  • There is no income limit to apply for the credit.
  • You cannot be married filing separately. Your filing status must be single, married, head of household, or qualifying surviving spouse with one qualifying child.

2. Make sure your child's age qualifies

While there is no income limit to prevent you from claiming the credit, there is a threshold below which your child(ren) must fall for you to qualify. Children must be under the age of 13 and/or unable to care for themselves. Older children are not eligible.

3. Consider only day camps

You cannot count your child's month-long summer camp experience as a work-related expense. You can only deduct the cost of day camps. But the type of day camp does not matter to benefit from this tax credit. Sports, artistic, musical or back-to-nature camps are all eligible.

Sleepaway camps do not count. You cannot deduct the cost of camps that require your children to stay overnight.

Childcare costs do not need to be split equally among your children.

Whether it's equipment for sports camp or paints and charcoals for art camp, these items cannot be considered deductions or counted toward the credit. You can't even claim that lime green T-shirt your child has to wear to camp. All expenses must be work-related to qualify. The expenses must allow you to work or look for work and must be for the care of an eligible person.

4. Pay the establishment

Payments must be made directly to the institution offering the camp. Payment must be made to the YMCA if your child attends a YMCA camp such as Tennis Day Camp for Kids.

Be sure to keep all your receipts and records from when your child attended camps. It probably won't hurt to keep a copy of the payment either.

You must provide the address when preparing and filing your tax return, as well as a federal tax identification number (TIN), either a Social Security number (SSN), or a federal tax identification number. employer (EIN), for summer camp. .

5. Use Form 2441 to claim the credit

You will only get this tax credit if you fill out the appropriate form. You or your accountant must attach Form 2441: Child and Dependent Care Expenses to your Form 1040 or Form 1040-SR.

You cannot apply for credit until your child(ren) has attended their camp, even if you pay for it in advance. Keep in mind that the credit amounts are for an entire year of child care expenses, not just camp-related activities. Try not to write off the entire amount if you plan to apply for the credit to help pay for summer day camps and think you might need it later in the year.

What is the Child and Dependent Care Credit?

The Child and Dependent Care Credit is a tax credit offered by the IRS to certain taxpayers who have eligible child and dependent care expenses. Eligible children must be under the age of 13. Dependents may also qualify if they are physically or mentally incapable of caring for themselves and have lived with you for more than half the year.

You cannot claim the credit as a married couple filing separate returns, and you (and your spouse if filing jointly) must have earned income. There is no income limit to qualify for the credit.

What types of camps are eligible for the child and dependent care credit?

The cost of any type of day camp is covered up to 35% of eligible expenses up to $3,000 for one child or dependent and up to $6,000 for two or more children or dependents. You can deduct the cost of sports camps, arts camps, fitness camps and any other type of day camp. Keep in mind that you cannot claim expenses related to overnight camps.

What camp expenses can I claim under the Child and Dependent Care Credit?

You can deduct expenses related to the camp itself, such as attendance fees, but you cannot deduct any additional expenses under the child and dependent care credit. You cannot deduct the cost of materials like paint or notebooks. pencils or paper if your child is attending an art camp.

The essential

Working parents with school-aged children can use the Child and Dependent Care Credit to help balance the high cost of summer camps. The credit might lower your tax bill next April, but it won't reduce the upfront costs of day camp. Be sure to check with your accountant or tax professional if you have any questions regarding credit.

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