If you and your spouse work, or if you're a working single parent, sending your child to a summer day camp might make you eligible for the Credit for Child and Dependent Care Expenses.
Only day camp expenses qualify for the credit, so the cost of an overnight/sleepover camp does not.
If you have one qualifying child you can claim the credit on up to $3,000 in total expenses. For two or more qualifying children, the maximum is $6,000.
The amount of child care expenses eligible for the credit is further limited by your earned income. Married couples are limited to the lower of the two earned incomes. If one spouse earns $50,000 and the other $2,500, only $2,500 of expenses is eligible for the credit.
In most cases if you are married you must file a joint return to claim the credit.
The amount of credit allowed depends on your AGI. If it does not exceed $43,000, the credit ranges from 35% to 21%. The credit is 20% if your AGI is more than $43,000.
The credit is allowed for a dependent under age 13. You can claim a credit on expenses incurred up to the child's 13th birthday. If your child will turn 13 this November you can still claim the credit on any day camp expenses incurred during the summer.
Day camp costs also qualify for reimbursement under an employer-sponsored "pre-tax" Dependent Care Benefit plan. In most cases you will receive a greater tax benefit by running the day camp costs through a "flexible spending" dependent care program than by claiming the credit.
Be sure to get the Employer Identification Number of the day camp when registering. You will need this to complete IRS Form 2441 next year.
New Jersey tax pro Robert D. Flach has been preparing 1040s for individuals since 1972.
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