With summer in full swing, there is a tax break that working parents should know about. Many working parents must arrange for care of their children under 13 years of age during the school vacation period. A popular solution — with a tax benefit — is a day camp program.
The cost of day camp can count as an expense towards the child and dependent care credit. But be careful, expenses for overnight camps do not qualify. If your childcare provider is a sitter at your home or a daycare facility outside the home, you will get some tax benefit if you qualify for the credit.
The credit is generally 20% to 35% of non-reimbursed expenses; up to $3000 in expenses for one child and up to $6000 for two or more children. The actual credit is also based on your income. The credit is 35% of the child care expense if your income is under $15,000. The credit percentage gradually decreases as the income gets higher, but remains at a fixed 20% rate once your income exceeds $43,000.
If you have questions regarding the available tax credits for child care and what the tax benefit would be if your child attended a summer day camp please give our tax experts a call.