Your Child's Summer Camp may save you money on your taxes

The cost of sending your child to a summer day camp can be claimed as part of the Child and Dependent Care Credit.  There are of course certain limitations that apply, but for the most part it’s something worth considering.  It is likely a deduction that has been overlooked by many in the past and can really make a difference when you file your taxes.  This credit reduces the tax liability, in other words for each dollar of credit, you subtract a dollar of tax.  So if your tax based on your income was $7,000 and your child and dependent care credit was $2,000 your tax liability would be $5,000.

If you work or are looking for work you may claim the expenses for your child under the age of 13 during their school break.  Expenses for overnight camps do not qualify.  The provider can be a sitter at your home or a day care facility.  You will have to report the information about the provider, including their tax ID number (EIN or SSN).  The credit will be as much as 35 percent of your expenses, but the actual percentage is based on your income.  You can claim up to $3,000 of unreimbursed expenses for one qualifying individual or $6,000 for two or more qualifying individuals.  If you already claim dependent care expenses during the school year then this may not help you, but if you are not currently claiming up to the $3,000/$6,000 limit it is worth looking at. 

If you have any questions related to the credit you can look up Publication 503, consult your tax advisor or send me an email.