If both you and your spouse 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.
Only
day camp expenses qualify for the credit. The cost of an overnight/sleepover
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 lower 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 "deemed"
to earn $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
"deemed" to earn the $250.00 or $500.00.
The amount of credit allowed 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% if your AGI is 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 who is 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 November you can still claim the credit on any day camp expenses incurred
during the summer.
Day camp costs also qualify for
reimbursement under an employer-sponsored "pre-tax" Dependent Care
Benefit plan. In most cases you will receive a greater tax benefit by running
the day camp costs through your employer's "flexible spending"
dependent care program than if you claim the credit.
If you will be claiming the credit
on payments made for a summer day camp, be sure to get the name, address and Employer Identification Number of
the camp when registering. You will need this information to complete Form
2441, the IRS form used to claim the credit.
{It
is important 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. - rdf”}
Some states, such as New York, also
allow a Child Care Credit on the state income tax return.
TTFN
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