Every summer, my always clients ask me, “Is my kid’s summer camp tax deductible?”
And I always reply with a range of answers: “Yes”, “No” and “Maybe”.
This article will explain why your kid’s summer camp may or may not be tax deductible, depending on your family’s particular situation, income level, and tax bracket, as well as your family’s marital status.
Does Your Summer Camp Qualify for a Tax Credit?
The short answer: “Yes.”
Since summer camp is a form of daycare, parents who both work typically find some kind of daytime activities for their children under age 13 to keep them occupied during the extended school vacation from June through August.
As part of the child and dependent care credit, the IRS shares this information:
- The cost of a day camp may count as an expense –– during summer or anytime of the year –– towards the child and dependent care credit.
- Expenses for overnight camps do not qualify for a tax deduction; only day camps.
- Whether your childcare provider is a sitter at home or at daycare facilities outside of your home, you’ll receive a tax benefit if you qualify for the credit.
- The tax credit can be as high at 35% of your qualifying expenses, depending on your income bracket.
- You may actually use up to $3,000 of the unreimbursed expenses paid in a year for one qualifying child, or $6,000 for two or more children to determine the credit.
Does Your Babysitting Costs Count as a Deduction?
Again, the short answer is “Yes.”
The child and dependent care credit provides tax breaks for parents or guardians, as well as for full-time students or parents who were unemployed for part of a year.
If you paid a babysitter, a daycare center, a summer camp, or other similar providers to care for your child up to 13 years old, you may qualify for a similar tax credit of up to 35% of your qualifying expenses of $3,000 for one kid, or up to $6,000 for two or more dependents.
What Qualifies as Qualifying Expenses for the Tax Credit?
Did you know that the IRS considers more than just the cost of daycare for the Child and Dependent Care Credit? Expenses also may include your childcare costs by a babysitter, by a licensed dependent day care center, as well as the cost of a cook, a housekeeper, a maid, or a cleaning person who provides care for your child or your dependent.
What Summer Camp Fees Qualify?
Just about any kind of summer camp can qualify. These can include tennis camps, lacrosse camps, swim camps, music camps, theater camps, chess camps, even poetry camps qualify if the camp is selected to provide daycare while the parent or the parents are at work. Again, overnight camps do not qualify, so choose your summer camp wisely if you want to earn the tax credit
What About Qualifying Expenses for a Disabled Dependent?
However, if you need daycare for a disabled dependent of any age, again, you can qualify for a similar tax credit as above, with additional qualifying expenses for any costs related to before- or after-school daycare for children under 13, plus any extra expenses related to a nurse, a home care provider, or other care provider for a disabled dependent.
What Does Not Qualify for a Deduction or a Tax Credit?
Any expenses for school, tutoring, or overnight camps do not qualify, such as sports or music equipment or uniforms. In addition, stay at home and unemployed spouses are not eligible to claim the credit, either.
What Are the Qualifications for the Care Credit?
To qualify for the child and dependent care credit, you must meet each and all of the following criteria:
- You, and your spouse if you’re married and filing jointly, must have earned income for the tax year.
- You must be the custodial parent or main caretaker of the child or the dependent.
- Your child’s or dependent care service must have been used so you could work or you could look for work.
- Your filing status must be single, or head or household, or qualifying widow, or qualifying widower with a dependent child, or married, filing jointly.
- Your child or your dependent must be under 13 or must be disabled and physically or mentally incapable of caring for himself or for herself.
- Your childcare provider can’t be your spouse or your child’s parent.
- You must attach a Federal Form 2441 to your Federal Form 1040, Federal Form 1040A, or Form 1040NR, but you can’t file a 1040EZ or 1040NR-EZ (PDF) to claim the credit.
- You must include your child’s name and their Social Security number.
What Are Some Exceptions to These Rules?
Some couples are married. Some are divorced. Some are separated. That’s why the IRS provides certain exceptions to the rules in qualifying for tax credits. These include:
- For parents who are divorced or separated, the parent who the child resides with the majority of the time (the custodial parent) can claim this credit, even if their divorce or separation agreement claims otherwise for the non-majority parent.
- If you take care of a disabled adult, you may take the tax credit even if you can’t claim him or her as a dependent because he or she may earn too much gross income, or because you or your spouse can be claimed as someone else’s dependent.
- If your spouse happens to be a disabled adult, the IRS can waive the requirement for him or her to have earned income.
- And if your spouse happened to be a full-time student who attended college for at least five months of the most recent tax year, the IRS considers that person to have earned income for each month he or she was a student attending school full-time.
At Books In Balance, we hope you and your kids have a great summer!
Latest posts by Brandon Dante (see all)