The hubby and I are child-free, but our neighborhood is full of kids. It's also full of moms and dads who both work outside the home.
So what do our working parent neighbors do when school is out for the summer and their youngsters have hours and hours free?
No, they don't drop the kids off at our house. We are definitely not that good of neighbors.
They send them to summer camp.
And if it's a day camp, all the better.
You don't have to mess with young Joni's or Jimmy's homesickness.
You don't have to deal with your own parental separation anxiety.
And you might be able to use the day camp costs to claim a credit on your tax return next filing season.
Most parents already know they can claim the Child and Dependent Care tax credit for expenses they incur for the care of kids younger than age 13.
But the tax credit also is available in connection with your kid's day camp. That's a dollar-for-dollar reduction in your tax liability.
And that's why claiming day camp costs is this week's Weekly Tax Tip.
Camp credit rules: Of course, taxes are just as infuriating as raising a kid, or so parents and tax pros tell me.
That means getting Uncle Sam to help out with your kid's summer fun costs is not as simple as toting up the camp expenses and subtracting them from your tax bill.
When you calculate your credit, you can count only up to $3,000 in year-round child care expenses for one qualified dependent or up to $6,000 for two or more.
And your day camp costs don't get you a separate credit claim. They are counted along with the after-school care you paid the other nine months of the year.
Even after you add up all your care costs, you can only claim a percentage of the total. Your exact credit will be 20 percent to 35 percent of your child care expenses, depending on your income. But some tax relief is better than none.
Day only and for working parent: You've probably already noticed that I keep say "day camp." These drop the kids off, pick them up later programs are the only camps eligible for the credit.
While many parents and their kids love away camps that fill up much of the summer, those operations don't qualify for this tax credit.
And one more thing. All the rules of the dependent care credit count. That means that you send the kids to day camp because they need looking after while you work.
If you're a stay-at-home parent and would like to simply get the kiddos out of your hair for a while, no one is judging.
But the IRS won't help pay for your effort to regain a few quite hours for yourself and your sanity.
Camp choices: Here in Austin, rock camps are a big deal. But there are plenty of camps, day and extended, for all kinds of interests.
Check out the National Camp Association and the American Camp Association. Both have online search engines to help you find the right place for your child.
And Summer-DayCamps.com, as the name suggests, can help you track down a daytime-only, tax credit eligible camp that you, your child and your tax accountant all will love.
Rock climbing kid photo by nojustice/iStock
Related posts:
- Camp for kids, tax break for parents
- Midyear tax tip: Credit for day camp costs
- Rock 'n Roll summer camp
- Tax help for summer camp costs
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