Summer camp can provide kids with fun experiences, new friends, and maybe even a few life lessons. But can it also provide you with a tax break?
In today’s post, I’ll explain how sending your child to summer camp could lower your tax bill.
Can I deduct my child’s summer camp on my taxes?
You can’t actually deduct summer camp expenses from your taxes, but you might be able to claim the Child and Dependent Care Credit to recover some of those costs.
How can summer camp expenses qualify for a tax credit?
Here’s how it works: If you paid a summer camp, daycare center, babysitter, or other care provider, you may qualify for the Child and Dependent Care Credit if you meet all of these criteria:
- Your child attended summer camp or received care so you could work, look for work, or attend school.
- The summer camp is a day camp only and not an overnight camp.
- You paid for care for a child under age 13, or you paid for care for your dependent or spouse who has a physical or mental disability that prevents them from caring for themself.
- You have earned income for the year (there are special rules for students or those with disabilities).
- Your child or dependent lived with you for more than half of the tax year.
- You file as single, married filing jointly, head of household, or qualifying surviving spouse, and your child is listed as a dependent on your return. Note: If you file as married filing separately, you’ll need to meet other requirements.
- Your summer camp or care provider isn’t your spouse, the parent of your child, or another of your dependents or child who is younger than 19 by the end of the tax year.
- You identify the summer camp or care provider on your tax return using the appropriate form (more about this in a minute).
How much can I save in taxes using this child care credit for summer camp?
You can use the credit for up to 35% of your qualifying expenses. Basically, the higher your income, the less you’ll be able to claim.
For instance, if you earn around $15,000 or less, you can claim 35% of eligible expenses. As your income increases, the percentage decreases by 1% for every couple thousand dollars of income, until it drops to 20% for incomes around $43,000 or more. The exact amounts depend on the tax year, and in tax year 2021, credit amounts and requirements were quite different.
When claiming the Child and Dependent Care Credit, you may use up to $3,000 of unreimbursed expenses paid in one year for one qualifying dependent or $6,000 for two or more qualifying dependents. Remember this is a credit and not a deduction, so you will subtract the amount of your credit from your tax bill. However, it is a nonrefundable credit, which means that if your tax bill is less than the amount of the credit, you don’t get that extra amount back as a refund.
For example, if you spent $2,500 on your child’s summer camp, you could be eligible to claim 35% of that amount – $875 – as a tax credit. That amount would be subtracted from your total tax bill, but if it reduces your bill to below $0, then you would not receive a check for that amount.
How do I claim the Child and Dependent Care Credit for summer camp?
You’ll claim this credit for summer camp the same way you would if you paid for daycare or another form of child care throughout the year. You’ll do this by completing the following information on Form 2441 and attaching it to your income tax return:
-
Enter the information about the summer camp or care provider in Part I:
- Name
- Address
- Social Security Number (SSN) or Employer Identification Number (EIN)
- Amount paid to camp or provider
-
Enter the information about the qualifying dependent(s) in Part II:
- Name
- SSN
- Amount paid for their care
Are there any other tax savings for summer camp?
While there aren’t necessarily any other tax savings for summer camp, you should definitely look into whether your employer offers a Flexible Spending Account (FSA) that you can use to pay for dependent care.
This type of account allows you to use pre-tax dollars to pay for childcare, which could also apply to summer day camp fees. If your employer offers this benefit, it’s worth taking advantage of it to save on taxes.
Final Thoughts
If you meet the requirements laid out by the IRS, then your child’s summer camp fees can qualify you for some tax savings in the form of the Child and Dependent Care Credit. Just remember that if it’s an overnight camp, it won’t count for this credit.
If you’re unsure whether or not you claim this credit, or if you just want to know more about tax-saving strategies, speak to an accountant. Their expertise might just lower your tax bill and leave you with a sunny, summertime feeling all year long.
