Claim the Child Care Credit on Summer Day Camp Costs
Editor's Note: This article is part of our 2014 Tax Tips series. Robert Flach is an expert with more than 40 years of experience as a tax professional and also blogs as The Wandering Tax Pro.
NEW YORK (MainStreet) If both you and your spouse work, or if you are a working single parent, the cost of day care or after-school for your dependent child under age 13 care may qualify for the Credit for Child and Dependent Care Expenses.
You can also claim the credit, reported on IRS Form 2441, on the cost of a summer day camp. Only day camp expenses can be used for the credit. The cost of an overnight camp does not qualify.
If you have one qualifying child you can claim the credit on up to $3,000.00 in expenses. For two or more qualifying children the maximum is $6,000.00.
The amount of child care expenses eligible for the credit is further limited to the earned income of the taxpayer or spouse. If one spouse earns $50,000.00 and the other $2,500.00, only $2,500.00 of expenses is eligible for the credit.
If one spouse works and the other is disabled or a full-time student, the non-working spouse is treated as earning $250.00 per month if there is one qualifying child or $500.00 per month if there is more than one. This applies to only one spouse per month. If both spouses are full-time students during the same month, only one is treated as earning the $250.00 or $500.00.
The amount of the credit depends on your Adjusted Gross Income. If your AGI does not exceed $43,000.00 the credit ranges from 35% to 21%. The credit is 20% for AGI of more than $43,000.00. In most cases, if you are married you must file a joint return to be able to claim the credit.
The credit is allowed for a dependent under age 13. However, you can claim the credit on expenses you have incurred up to the child's 13th birthday. If your child will turn 13 this October you can still claim the credit on any day camp expenses incurred during the summer.
When claiming the credit on payments made for a summer day camp, or any other day care provider, make sure you have the Employer Identification Number of the provider (the Social Security Number if an individual). You will need to enter this number when identifying the camp on Form 2441.
--Written by Robert D. Flach for MainStreet