In addition to all the benefits of summer camp that your kids will get, you as a parent may also be able to get a tax credit in order to subsidize the cost of day camp for your children. Summer camp costs are considered qualifying child care, and as a taxpayer, you can claim a Child Care Credit against the cost of sending your child to summer camp. There are a few rules that you need to meet in order to qualify for the tax credit for summer camp.
• Working Parents – In order to qualify for the tax credit, you need to be employed or, in some cases, looking for work. The rationale behind the tax credit is to give assistance to parents that are unable to care for their children because they are at work. This means that the credit cannot be extended to a family where there is a stay-at-home parent.
• Day Camp – The credit is only available for day camps like the summer camp programs that we run here at Marple Sports Arena. It cannot be claimed for sleep-away camps.
• Caps on Cost – The Child Care Credit provides a maximum of $3,000 for parents with one child or a maximum of $6,000 for parents with more than one child. This total is calculated on an annual basis and includes all qualifying child care expenses – including day camp. The IRS also limits the portion of all child care costs that can be claimed to between 20% and 35% of total child care costs in any given year. The percentage varies depending on income and tax bracket.
• Direct Dependents – The child care credit that also includes summer camp costs is only claimable for direct dependents. Therefore, only parents or guardians whose children are registered as direct dependents can claim the credit.
• Actual Payment and Camp Attendance – In order to claim the summer camp costs to get tax relief, you must have actually made payments to a registered day camp and have receipts for the day camp services. Payments made by employers or non-monetary payments do not qualify for the tax credit. Additionally, the child must actually attend the camp in order to claim the costs for the tax credit. If your child does not attend, you cannot claim the costs of the summer camp toward your child care credit even if there is no refund for payments made.