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Summer day camp may reap tax benefits

Published: June 15, 2011 6:24 AM
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COLUMBUS, Ohio " Are you a working parent who is sending your pre-teen child to day camp this summer? If so, the Internal Revenue Service wants you to know that summer daycare expenses may qualify for a federal income tax credit.

"Working or job-hunting parents of preschool children may already be aware of the tax credit available for childcare expenses, especially in the case of preschoolers in year-round daycare programs. Some parents, though, may only need childcare for their pre-teen children during the summer vacation period," said IRS spokesperson Jennifer Jenkins. "Those summertime childcare expenses may help parents get a valuable credit on next year's tax return."

A popular summer vacation daycare solution " with potential favorable tax consequences " is a day camp program. To qualify as a tax credit, though, program expenses must be considered work-related. "Expenses must allow you to work or look for work in order to qualify as work-related," Jenkins stated. "The IRS does not consider the cost to send a child to an overnight camp a work-related expense, but the cost of sending a child to a day camp " to include a specialty camp like soccer or computer " may qualify as work-related," she said.

Expenses for enrollment in traditional care programs, like daycare centers and sitters, may qualify for the tax credit, provided the programs meet all applicable state and local regulations. However, you may not claim the credit for payments made to your spouse or to someone you or your spouse could claim as a dependent. Also, expenses must be for care provided to a qualifying person, such as a qualifying pre-teen child, qualifying dependent, or a mentally or physically disabled spouse.

Here are some facts the IRS wants you to know about a tax credit available for child and dependent expenses.

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The Child and Dependent Care Credit is available for expenses incurred during the summer and throughout the year to provide care for a qualifying person.

The cost of day camp may count as an expense towards the Child and Dependent Care Credit, but the expense for an overnight camp does not qualify.

You (and your spouse if filing jointly) generally must have earned income during the year to qualify.

The actual credit can be up to 35 percent of your qualifying expenses, depending upon your income.

You may use up to $3,000 of the unreimbursed expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals to figure the credit.

For more information check out IRS Publication 503, Child and Dependent Care Expenses. This publication is available on the IRS website, www.IRS.gov, or by calling 800-TAX-FORM (800-829-3676).

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