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Ask Kim

Can I Write Off My Kid's Summer Camp on My Tax Return?

If your child is younger than 13, you may qualify for the child-care tax credit.

My son goes to camp for most of the summer, and his babysitter picks him up and watches him until I come home from work. Can I take the child-care credit for these costs?

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If you pay for the day camp and a babysitter so that you can work, the expenses can qualify for the credit. If you’re married filing a joint return, both you and your spouse must work (one spouse may be a full-time student if the other is working). Care provided while you’re actively looking for work counts, too, but only if you have some earned income during the year. Your child must be younger than 13 when the care is provided.

The cost of care provided while you work by a day camp, day care or preschool, or by a babysitter or nanny, counts toward the credit, which reduces your tax liability dollar for dollar. The cost of kindergarten and higher grades do not count, but before-school and after-school care can qualify. The costs of a sleepover camp and tutoring don’t count.

Up to $3,000 in care counts as an eligible expense if you have one child, and care up to $6,000 counts if you have two or more children. The size of the credit varies from 20% to 35% of those expenses, depending on your income. The credit is worth 35% of eligible expenses if your income is $15,000 or less; it gradually shrinks to 20% if you earn $43,000 or more. There is no maximum income limit to qualify for 20%. If you earn $43,000 or more, for example, your credit is worth up to $600 if you have one child, or $1,200 if you have two or more children. The income levels for the credit are the same whether you’re married filing jointly, single, or a head of household.

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To claim the credit, file Form 2441 with your 2015 taxes next spring. You must provide the name, address and tax identification number or Social Security number of the care provider. For more information, see IRS Publication 503, Child and Dependent Care Expenses, and Tax Topic 602.

If you have a dependent-care flexible spending account at work, you can’t use money from that account and take the child-care credit for the same expenses. But if you have two or more kids and you’ve used $5,000 from your FSA, you can take the tax credit for an extra $1,000 in child-care expenses (because the limit is $6,000 if you have two or more kids). Claiming that extra $1,000 can reduce your tax liability by $200 to $350, depending on your income.

Got a question? Ask Kim at askkim@kiplinger.com.