Advertisement
Tax Breaks

A Tax Break for Sending the Kids to Camp

You can claim the dependent-care tax credit for the cost of day camp if your children are younger than 13 and you're sending them to camp so you can work or look for work.

Does the cost of summer camp qualify for the child-care tax credit?

It can. You can claim the dependent-care tax credit for the cost of day camp if your children are younger than 13 and you're sending them to camp so you can work or look for work (the cost of overnight camp doesn't count). What you spend for day care, preschool, before- or after-school care, a nanny or other baby sitter while you are working also counts toward the credit. You must have earned income to qualify for this credit and, if you're married, both you and your spouse must have a job or be a full time student.

Advertisement - Article continues below

The size of the credit depends on the number of children and your income. You can count up to $3,000 in child-care expenses for one child or $6,000 for two or more children. The size of the credit gradually decreases as income increases. Families earning less than $15,000 can take a credit for up to 35% of those expenses; families earning more than $43,000 can deduct 20% of the eligible costs. So if you have two children and pay more than $6,000 for care, you can claim a $1,200 credit if you earn more than $43,000. This is a credit -- not a deduction -- so it lowers your tax bill dollar for dollar.

To claim the credit, you'll need to file Form 2441 with your tax return (see the 2008 Form 2441 for the basic information; the 2009 form should be available in the fall). You'll need to know the care provider's employer identification number or Social Security number. For more details about which expenses qualify - especially if you work part-time or get child-care benefits through work - see IRS Publication 503 Child and Dependent Care Expenses and the instructions for Form 2441.

If you use a flexible spending account at work to pay child care expenses with pre-tax money, you can tap that account to pay qualifying summer camp costs instead of claiming the credit.

Advertisement
Advertisement

Most Popular

7 Surprisingly Valuable Assets for a Happy Retirement
happy retirement

7 Surprisingly Valuable Assets for a Happy Retirement

If you want a long and fulfilling retirement, you need more than money. Here are the most valuable retirement assets to have (besides money), and how …
August 3, 2020
Shrink Your RMDs in 2021 and Beyond
annuities

Shrink Your RMDs in 2021 and Beyond

QLACs are a special type of annuity that lets you cut RMDs from your IRAs next year and beyond, reduce the taxes you pay and guarantee more lifetime …
August 6, 2020
How a Second Stimulus Check Could Differ from Your First One
Tax Breaks

How a Second Stimulus Check Could Differ from Your First One

The HEROES Act, which was passed by the House in May, would authorize a second round of stimulus checks. While the new payments would be similar to th…
July 22, 2020

Recommended

Tax-Free Weekend Savings from August 7 to 9
Tax Breaks

Tax-Free Weekend Savings from August 7 to 9

Florida, Iowa, Maryland, Missouri, New Mexico, Ohio, Oklahoma, South Carolina, Texas, and Virginia are holding (or starting) 2020 sales tax holidays t…
August 7, 2020
Sales Tax Holidays in 2020
Tax Breaks

Sales Tax Holidays in 2020

Sixteen states are having sales tax holidays this year. If you plan your shopping around these tax-free periods, you can save big on back-to-school cl…
August 4, 2020
6 Money-Smart Ways to Spend Your Stimulus Check
Tax Breaks

6 Money-Smart Ways to Spend Your Stimulus Check

If you don't have to use your stimulus check for basic necessities, consider putting the money to work for you. You'll thank yourself later.
July 30, 2020
New Family-Focused Stimulus Check Plan Introduced by Four Republican Senators
taxes

New Family-Focused Stimulus Check Plan Introduced by Four Republican Senators

The proposal from Senators Cassidy, Daines, Romney and Rubio would provide $1,000 payments to all American citizens, regardless of age or dependent st…
July 30, 2020