Are there any tax breaks for summer camp for my kids?

The child and dependent care credit is designed to assist working parents and guardians with some of the expenses involved in raising a child or caring for a disabled dependent. The credit, which varies depending on the taxpayer’s earned income, is based on the expenses paid to provide child or dependent care services so that parents can work.

You may be aware that daycare fees qualify for the child and dependent care credit, but the IRS actually considers much more than just the cost of daycare for this credit. Day camp or summer camp fees, even for camps centered on a sport or activity, qualify if the camp was selected to provide care while the parent or parents were at work. However, overnight camps do not qualify. Qualifying expenses also include before- and after-school care, childcare provided by a babysitter or licensed dependent care center that provides care for the qualifying person.
The IRS requires that the name, address, and tax identification number be reported by the individual claiming the qualifying expenses.

The tax credit is up to 35 percent of qualifying expenses up to $3,000 for one child or dependent, or up to $6,000 for two or more children or dependents.

In addition to qualify for the credit you must have earned income and the expenses must have been used so that you could work or look for employment.

While there are restrictions on the credit you should be sure to consider this tax break when sending the kids to camp this summer and completing your 2014 tax return.

Please remember these are general rules and you should always speak with your trusted advisors about your particular situation.

Brian is a CPA at Gamwell Caputo Kelsch & Co., PLLC in Conway, NH and can be reached at 603-447-3356. Brian welcomes any article feedback or questions for future article consideration.