Day camps are common during school vacations and the summer months. And their cost may count towards the child and dependent care credit.
Here are five things parents should know:
1. Care for Qualifying Persons. You may qualify for the credit whether you pay for care at home, at a daycare facility, or a day camp. Your expenses must be for the care of one or more qualifying persons, such as your dependent child under age 13.
2. Work-Related Expense. In other words, you must be paying for the care so you can work or look for work.
3. Expense Limits. The total expense you can claim in a year is limited. The limit is generally $3,000 for one qualifying person or $6,000 for two or more.
4. Credit Amount. The credit is worth between 20 and 35 percent of your allowable expenses. The percentage depends on your income.
5. Excluded Care. Certain types of care don’t qualify for the credit, including:
- Overnight camps, Summer school tutoring,
- Care provided by your spouse or child under age 19 at the end of the year, and
- Care given by a person you can claim as your dependent.
Remember that this credit is not just a school vacation or summer tax benefit. You may be able to claim it at any time during the year for qualifying care. For more information, please call our office.