Using Summer Day Camp as a Tax Deduction
If you sent your kid(s) to summer camp this year, make a mental note to mention it to your tax guy come Spring. You may be able to write off some of your kids' summer fun.
I was reading an article in Consumer Reports recently about ways to save money on summer camp expenses, and one entry in particlar caught my attention.
It talked about how parents, who both work, can write off a portion of their childcare expenses during the summer - and as I'm sure you're well aware, we got a lot of two working parent families in South Dakota. At one time it was the highest in the country.
Apparently, the deduction is part of the new childcare tax credit, and depending on your income the credit could be worth up to 35% of the cost - up to $3000 for one child and up to $6000 for multiple children.
There are specific stipulations, however. Following is the portion of the article that caught my eye:
Claim a tax credit, if you qualify. Though you can’t claim a tax credit for sleepaway camp, you may be able to qualify for one if your child attends day camp. To qualify, both you and your spouse (if filing jointly) must need child care because you are both working, attending school, or looking for a job during camp (you cannot claim if one of you is a stay-at-home parent). The credit offsets up to 35 percent of the cost of camp, depending on your income: up to $3,000 for one child or $6,000 for multiple children. It kicks in after any other pretax money that you’ve used for camp expenses.
If you think you may qualify for this type of deduction, one suggestion made was to set aside the paperwork for daycamp now so you won't have to scramble to find it come tax filing season next spring. It'll save both you and your accountant a lot of stress.
Source: Consumer Reports