Relax Mom and Dad – You Still Get a Tax Credit for Summer Camp
School is out and that means it’s time for Summer camp for the kids. Although summer camps can be expensive, whether it’s band, theatre, computer, or sports camp, the Child And Dependent Care Credit provides a welcome tax break for many parents!
If you are working and responsible for the cost of childcare, you qualify for the credit whether you pay for that care at home, at a daycare facility or at a summer day camp while school is out. Though the credit is geared toward working parents or guardians, taxpayers who were full-time students or who were unemployed for part of the year may also qualify as long as you were actively looking for work. Whether you are single and have no one to stay at home and babysit, or you and your spouse both work, you’ll qualify for the tax credit.
Remember tax credits are more valuable than tax deductions! Tax credits reduce your tax bill dollar for dollar, so the tax savings add up quickly. You can take the Child and Dependent Care Credit for up to 35% of $3,000 in childcare and camp costs for one child, or $6,000 for two or more children, depending on your income level. That can mean a tax credit of up to $1,050 for one child and $2,100 for two or more children.
Here’s the general rules and the scoop on summer camp tax credits:
• Only day camp expenses qualify, overnight camp expenses don’t qualify for the credit.
• Lost deposits from enrolling a child in camp and canceling won’t qualify.
• Summer school tutoring costs are not eligible.
• Camp, babysitting, or any other type of day care arranged for strictly personal reasons can’t be taken into consideration.
• Other care that does not qualify:
o care given by a person you can claim as your dependent.
Contact Us: It’s easy to file for Summer Camp Tax Breaks. Your Fuoco Group professionals can help with the necessary Form 2441, Child and Dependent Care Expenses. Keep in mind, you must have earned income for the year, along with your spouse, if filing jointly. If the amount owed in taxes is less than your credit, you can only zero out your bill.
Remember every family is different, and the IRS has exceptions to the rules that allow a greater number of families to take advantage of the credit. The cost of a cook, housekeeper, maid, or cleaning person who provides care for your child may be a qualified expense.
Let us help you identify other tax credits, deductions, and benefits you might be eligible for. Whether in New York or Florida, call toll free 855-534-2727, and speak to one of our tax specialists about your situation today.
