Sending your children to day camp or summer camp can be an expensive endeavor. Even so, you may believe you have no other option for child care if you are working or going to school full-time or on the lookout for new employment.
To help you afford this expense, the IRS may allow you to deduct the costs of day camp or summer camp for your children or dependents on your tax return. You can determine if you are eligible for this exemption by learning more about the Child Care Tax Credit.
The Child Care Tax Credit Defined
The Child Care Tax Credit is a credit that is designed to ease the financial burden you face as a parent in sending your child or children to day camp or summer camp. You are typically eligible if you are employed or enrolled in college full-time. You also could be eligible if you meet the outlined income criteria and are unemployed but seeking employment during the tax year.
Depending on your eligibility, you could be reimbursed for up to 35 percent of the money that you spend on sending your children or dependents to day or summer camp. This credit reduces the amount of money that you will owe to the IRS for taxes and will also increase the amount of your tax refund that the IRS owes to you.
Are Summer Camp Expenses Tax Deductible?
As long as you meet the outlined criteria for the Child Care Tax Credit, you are eligible to deduct up to 35 percent of your children or dependents' day or summer camp-related costs from your tax return. This amount cannot total more than $3000 for one child or $6000 for two or more children.
Further, it can include the costs for transportation to and from day or summer camp if the transportation costs are included with the camp's tuition. It cannot cover expenses like tutoring or schooling, however.
Child Care Tax Credit Requirements
Before you claim this credit on your tax return, it is critical that you ensure that you meet all of the outlined criteria for it. To start, the children you enroll in day or summer camp must be younger than age 13. If the child or dependent is disabled, he or she can be over the age of 13, however.
Further, you must have earned some type of income during the tax year for which you plan to claim this credit. You must have been employed full-time at your job. If you are not employed, you must have been looking for work or enrolled in college courses on a full-time basis.
Another important criterion requires you to be the primary caretaker of the child or children whom you have enrolled in day or summer camp. The child care provider cannot be your spouse or another dependent on your tax return. It also cannot be the parent of the child.
Qualifying for the Child Care Tax Credit
Qualifying for the Child Care Tax Credit requires you to abide by stringent criteria if you want the IRS to deduct the camp expenses from your taxes. As mentioned, the child or children for whom you plan to claim these expenses cannot be over the age of 13 unless they are disabled. You also must be either employed or enrolled in college on a full-time basis or you must be looking for work during the tax year.
Likewise, to claim this credit, you must utilize one of the approved tax filings statuses. These statuses are:
- Single
- Head of Household
- Widow or Widower with a Dependent Child
- Married Filing Jointly
The type of day or summer camp for which you plan to claim costs also must meet specific IRS criteria. It cannot be an overnight camp but instead be a day camp or daycare. Likewise, if you hire a babysitter to take care of your children during the summer months, you can also deduct that expense from your taxes as well.
More specifically, you can use this tax credit to deduct expenses like:
- Babysitter wages
- Daycare tuition
- Costs incurred for hiring a cook to prepare meals for your dependents or children
- Housekeeper wages related to child care
- Child care-related cleaning services
- Medical costs including home health services, physicals, and medication
Claiming these expenses can lower what you owe to the IRS and increase the amount of money you will get back in a tax refund for the year.
How to Deduct Child Care Costs on Your Tax Returns
If you plan on claiming the Child Care Tax Credit, it is imperative that you follow the necessary guidelines. You should use IRS Form 2441 to figure out what expenses you can deduct from your taxes. You should then transfer the total from that form to IRS Form 1040 or IRS Form 1040A.You also will need the full legal names and the Social Security numbers for all of the children under the age of 13 or disabled dependents for whom you plan to claim this credit. You are advised to save all of your camp tuition or babysitting receipts in case the IRS asks for verification or documentation of these expenses.
Exceptions to the Child Care Tax Credit
In some circumstances, taxpayers like you may be eligible for certain exceptions to the Child Care Tax Credit Rules. For instance, you could still claim this credit on your taxes even if you are divorced or separated and your spouse claims the children on his or her taxes as dependents per your divorce or separation decree.
You also may still claim the Child Care Tax Credit even if someone else claims you or your spouse as a dependent on their taxes. Further, if your husband or wife is disabled, you could claim him or her as a dependent on your tax return even if the spouse is not employed.
If you are a full-time student, you must have been enrolled in university or college classes for at least five months during the prior year. The federal government will consider you to have earned an income for each month that you were enrolled in school.
The Child Care Tax Credit allows you to deduct the costs associated with enrolling your children or dependents in day camp or summer camp. This credit will lower what you owe to the IRS. It also will increase the amount of the tax refund that the IRS will owe to you.
