So the kids are on summer break. Ahhh….all that quality time you can have with them now. Yay! But wait……did you say they are just on their screens….well you aren’t alone. It’s not like the good ole days when kids would play outside all day….bike rides, kickball, swimming, etc. etc. Now it seems to be hard to get them out of their rooms and into the great outdoors at all.
Well….here is an idea. Summer Camp!!!!! AND it’s tax deductible in some cases.
Welcome to the Child & Dependent Care Credit!
Many typical day cares run their centers as summer camps in the summer. And there are also the camps that are just open during the summer.
Here is when these camps are not only fun but also a tax deduction:
- the child is under the age of 13 at the time of the camp
- the child can be of any age if mentally or physically disabled and incapable if self care. The child must have lived with you for more than half of the year and was either: a) a dependent of yours or b) could have been your dependent except the child’s gross income was over the exemption amount or the child filed a joint return
- you and your spouse are working and/or are students and so the kids are at camp because you are working or at school
Overnight camps don’t qualify.
The credit is for 20% to 35% of the costs up to $3,000 if there is one child and $6,000 if there are 2 or more kids at camp. To get the $6,000 limit a second child must have gotten care for ANY amount of time…..even 2 hours for the whole year….this will boost the amount of care paid in total for ALL kids, raising the limit to $6,000. So if you have one child that needs care all year….and that includes summer camp, daycare, after school care, etc., then get your 12 year old to go to a camp for one day so that all the extra money you paid for the child that goes all year gets a higher limit for the credit. Ingenious!
Make sure you get a receipt, the camp’s name, address, and Federal ID number. You will need them for your tax return. If an individual is watching the kids instead of a company then in order to take the credit you will need to report the person’s name, address, and social security number. There are also special rules when a relative watches the kids. It can’t be your spouse, the parent of your qualifying individual, your child who is under age 19, or a dependent you claim on your tax return.
FYI this is the same credit that you would use for a spouse who is physically or mentally incapable of self-care and lived with you for more than half of the year.
Have a nanny? Well, first of all ….LUCKY YOU! Also, here is some info on Household Workers.