If Your Kids Attended Summer Camp, You Could Save on Your Taxes

As summer winds down, many parents are now facing the reality of what their summer child care costs actually totaled. Surprisingly, it is quite significant. When registering little Timmy for day camp back in the spring, the $250 early-bird fee seemed so insignificant. In addition to the weekly cost of camp, there were a variety of incidental costs, such as concession stand monies, field trip fees, souvenir dollars and three replacement swim goggles that contributed to a very shocking bottom line. 

Parents accept, even with the high cost, that the best solution to stave off antsy, mischief-laden children, is to send them to summer camp. Whether for a few hours each day, full day- every day, or sleep-away camp, even the most economical summer camp can cost $100 per week, per child. And, if you have more than one child, those costs can really add up.

When we counsel clients and explain that the summer camp they paid for may help lower their tax bill, they respond with disbelief. They have been paying hundreds of dollars, year after year, not knowing they may have been missing potential tax benefits, including:

The Credit

To encourage working parents, the IRS provides a tax break in the form of the Dependent Child and Care credit. This credit can reduce your overall tax bill by hundreds or even thousands of dollars. To claim this credit you must meet the following requirements:

1. The summer camp must be for a qualifying child. You can claim the credit for any child in your family (including nieces, nephews, and adopted children) as long as they are under the age of 13 when they attended camp and they lived with you more than half the year.
2. You and your spouse must have earned income and the reason for sending your child to camp is to be able to work or look for work. Earned income is any income you receive as compensation from a job or through self-employment. For purposes of claiming this credit, spouses who are students or are disabled are considered to have earned income and to have worked
3. Your filing status may be single, head of household, or qualifying widow(er) with a dependent child. Married couples must file jointly in order to claim the credit, unless legally separated or living apart. In that case you may file a separate return and claim the credit even if you cannot claim the child as a dependent. The credit may only be claimed by one parent.
4. The summer camp must be identified. You will need to provide the name, address, and taxpayer identification number of the summer camp on form 2441 of your tax return.

Special Considerations

There are certain situations that may affect how this credit is applied. Some of the most common include:

• Divorced or Separated Parents

The custodial parent claims the child’s expenses even if they cannot claim the child on their tax return. The custodial parent is the parent with whom the child lived with for more than half the year.

• Part-Year Qualifications

The expenses can only be claimed for the time that your child meets the requirements of a qualifying child. If your child turns 13 on July 16^th, then you can only claim the expenses through July 15^th.

• Education Expenses

Expenses for programs for pre-kindergarten and younger are qualifying expenses for care, and before- or after- school programs may qualify as well. However, the cost of school from Kindergarten through high school is not a qualifying care expense, nor is the cost of summer school or tutoring programs.

• Overnight Camps

You cannot claim a credit for the costs of overnight camps. Only expenses for day camps can be used to claim the credit, even if the camp specializes in something like sports, arts, or tech skills.