If you and your spouse both work, or if you are a working single parent, the cost of sending your dependent child (under age 13) to a summer day camp is eligible for the Credit for Child and Dependent Care Expenses. Day camp expenses qualify even if even if the camp specializes in a particular activity, such as computers or soccer.
Only day camp expenses qualify 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 in expenses. For two or more qualifying children the maximum is $6,000. The amount of expenses eligible for the credit it further limited to earned income of the parent – in the case of two working parents it is the lesser of the two incomes. If one spouse earned $50,000 for the year and the other $2,500, only $2,500 of expenses are eligible for the credit.
If one spouse works and the other is disabled or a full-time student the non-working spouse is “deemed” to earn $250 per month is there is one child or $500 per month is 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 “deemed” to earn the $250 or $500.
In most cases if you are married you file a joint return to claim the credit.
The credit is allowed for a dependent child who is under age 13. You can claim the credit on expenses incurred up to the child’s 13th birthday. If your son turns 13 in November you can still claim the credit on day camp expenses incurred during the summer.
The expenses must be incurred to allow you to work or actively look for work. According to IRS Publication 503 (Child and Dependent Care Expenses) “If you work or actively look for work during only part of the period covered by the expenses, then you must figure your expenses for each day. For example, if you work all year and pay care expenses of $250 a month ($3,000 for the year), all the expenses are work related. However, if you work or look for work for only 2 months and 15 days during the year and pay expenses of $250 a month, your work-related expenses are limited to $625 (2.5 months × $250).”
So if you are a teacher and do not work during the summer it would seem that you would not be able to claim a credit for summer day camp expenses.
Be sure to get the federal Employer Identification Number of the Day Camp if it is a “for-profit” business. You must report this number on the Form 2441 - the IRS will disallow the credit if you do not include an ID number. However, again according to Pub 503, “You do not have to show the taxpayer identification number if the care provider is one of certain tax-exempt organizations (such as a church or school). In this case, enter “Tax-Exempt” in the space where the tax form calls for the number.”
Day camp expenses also qualify for reimbursement under an employer-sponsored “pre-tax” Dependent Care Benefit “flexible spending account” (FSA). Generally the tax credit is 20%. If you are in the 25% or 28% bracket you will get a greater tax benefit by running your child care expenses through an FSA than if you claim the credit.