The Kids are at Summer Camp!

We recognize that the last week of June has been designated as National Camping Week! While the kids are at summer camp busy working parents enjoy the benefits of a few quiet days and evenings to relax, go on a date together, or work on personal projects that are always being pushed aside. Depending on the type of camp you send your child to, it may turn out to be pretty costly. But wait a minute…can’t we say that summer camp is “child care”, and take the credit for Child and Dependent Care expense? The answer is “Yes”, as long as a few basic criteria are met:

• The camp must be a day camp. This is because the IRS allows that the cost of a day camp can be work-related; allowing the parents to work or seek work. Tutoring, summer school, and overnight camps are not considered as work-related expenses.
• The child must be under 13 years old while at the day camp.
• You, and your spouse if you are married, must both be working or seeking work (this creates the need for child care).
• You must be able to supply the provider’s identity. In other words, the name, address and tax ID number of the camp.

If you meet these basic criteria, you can claim a maximum credit of 35% on unreimbursed expenses up to $3,000 for one child or $6,000 for two children. The amount of credit decreases at higher income levels, but does not completely phase out. If your AGI is $43,000 per year or higher, you are still eligible for a 20% credit. So, for example, let’s assume that you are eligible for a 20% credit. This means that if you spend $1,000 on day camp, you will receive a $200 tax credit. Not too bad, right?

You should be aware, though, that this credit for day camp is not in addition to the childcare tax credit. So if you already have more than $3,000 in unreimbursed day care expenses, and are receiving a credit for those, your day camp expenses are not eligible for an additional credit.

As with all tax-related issues, there are a number of additional rules and details to be followed, and for those you can find more information in IRS Publication 503, or contact the nearest PRO-TAX office to speak with a friendly, knowledgeable tax professional.

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