Explore Summer Camp Tax Breaks: Tip-of-the-Day #331

When I was kid, and it was summer break, I looked for any excuse to stay home and play Atari. I didn’t want to go to camp. That felt like work! I wanted to hang with my friends, make cookie dough and eat it raw, and choreograph dance routines to “What’s Love Got to Do With It?” in my front yard. Ahhhh, summer. But these days, I’ve learned from my sister that her kid and all of her kid’s friends are in day camp ALL SUMMER LONG.

It's not camp like we (in our forties) remember it…it’s camp with themes like “Pirates and Princesses”, “Pop Star Party!” and “Idol Performance Camp”. Sounds fantastic, right?? Only hitch is that it don’t come cheap. These camps are upwards of $100 a day! For parents who are already scraping to cover the cost of school, school supplies, babysitters, birthday parties, etc. this added expense is almost impossible. That said, I came across this article and quickly forwarded it to my sis.

Summer camp may be tax deductible!!

Here’s the 4-1-1 (straight from the tax experts at TurboTax):

  1. If you send your kids away to the mountains for a week, you won’t get a tax deduction. BUT, send ‘em away for the day, and now you are talking tax savings in the form of the Child and Dependent Care Credit, as long as your child is under the age of 13.
  2. Child and Dependent Care Credit is designed to enable you (the parent) to work or go to school, so if you have a spouse at home to care for the kids, then no deduction for camp. But if you are single, or you and your spouse both work, cha-ching, you’ll qualify for the tax credit.
  3. Sending the kids into the backyard to camp out doesn’t qualify as camp. You have to make payment for camp to a real institution or person, and you must include their address and identifying number on your tax return.
  4. Taking the kids to the camp location won’t qualify for the credit. But if the cost of transportation to and from camp is included in the fees, and the camp picks up and delivers, sweet – that qualifies for the credit.

So now that you qualify, what is the credit worth? To begin, tax credits are more valuable that tax deductions, since credits reduce your tax bill dollar for dollar, so the tax savings add up quickly. You can take a Child and Dependent Care Credit for up to 35% of $3,000 in child care and camp costs for one child or $6,000 for two or more children, depending on your income level. That can mean a tax credit of up to $1,050 for one child and $2,100 for two or more children.

I’m thinking my sis is going to be awfully glad she read this…

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