Claim a Tax Credit for Summer Camp Costs
Can I use the money in my flexible spending account for dependent care to pay for summer camp? And does the cost of summer camp qualify for the child care tax credit?
If your child is younger than 13 and you send him or her to summer day camp while you work or look for work, you can use money from your flexible spending account to cover the cost. The key is that only summer day camp counts -- not overnight camp -- and both spouses must work or be looking for work, unless one of the spouses is a full-time student.
The cost of camp can also qualify for the child care tax credit. The criteria are the same: Your child must be younger than 13 and be attending day camp (not sleepover camp) while you work or look for work, or are a full-time student. With both the FSA and the child care credit, other eligible expenses include the cost of day care or preschool, before-school care or after-school care, and a nanny or other babysitter while you work.
The size of the credit depends on your income and the number of children you have who are younger than 13. You can count up to $3,000 in child care expenses for one child or up to $6,000 for two or more children. The size of the credit gradually decreases as income increases. Families earning less than $15,000 can claim a credit for up to 35% of those eligible expenses; families earning more than $43,000 can claim a credit for up to 20% of eligible costs. To claim the credit, you must file Form 2441 with your tax return and include the care provider’s employer-identification number or Social Security number. When you pay your camp bills this summer, keep copies of the bills and get the camp’s or other provider’s employer-ID number so that you’ll have the information when you file your taxes next spring. For more information about the rules, see IRS Publication 503, Child and Dependent Care Expenses.
As with any child care expenses, you can’t use both a child care FSA and the child care tax credit for the same expenses. For most people, it’s a better deal to use the money from the FSA than to claim the child care credit (see FSA or Child Care Credit? for details). But if you have two or more children and your child care expenses exceed $5,000 for the year, you can benefit a bit from both accounts: You can set aside up to $5,000 in pretax money in your FSA for child care costs, then claim the child care credit for up to $1,000 in additional expenses (just counting $1,000 toward the child care credit could cut your tax bill by at least $200). For more information on how the two tax breaks interact, see Claiming the Child Care Tax Credit.
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