Deducting Summer Camp

Summer is almost here and the kids are excited and counting down the days.  But for parents, summer can bring stress and worry as they scramble about looking for childcare once school is out.

Fortunately, the IRS allows for tax credits for day camp for the pre-teen and younger set under the "Child and Dependent Care Credit."  Of course there are some stipulations. This is a short rundown of what the IRS has to say about deducting day camp expenses from your taxes.  

• The expense for day camp is eligible for the child and dependent-care tax credit if your child is under the age of 13. However, the credit is also available for older children, your spouse, and any other dependents of any age, who are not able to care for themselves.
• If your 12-year-old child turns 13 while in day camp you can claim the amount that applies before the birthday after prorating the expenses. 
• Specialized day camps can still be considered for the credit. So if the day camp focuses on soccer, golf, science or art, the expense still counts.
• The credit does depend on your income and the number of kids you have.
• If you participate in a "flexible spending account" at work, you're able to use the cash for day camp.
• Every camp should have an employer identification number (EIN). The name and EIN needs to be put on your tax forms. For church or school-based camps, you will only need to specify that they're a tax-exempt organization. No tax identification number is needed.
• Sleep-away camp expenses are not eligible for the credit. These camps are treated as an option, while day camp is treated as needed childcare.
• Next tax season may seem very far away but make sure to get the EIN when you use the camp, and hold onto receipts for camp costs you have paid.

Of course, with the IRS, there are always other exceptions to the rule, so talk with your KOS Advisor is you have any questions or concerns on these issues.  IRS Publication 503 provides details regarding income and the limits of the credit as well.