Make your child’s summer break a tax break

As a busy working parent, you are probably concerned about what activities are available for your kids this summer. However, there may be a solution that’s also a tax break: summer camp! The Child and Dependent Care Credit can reimburse you for part of the cost of enrolling your child in a day camp this summer.

Eligibility for the Child and Dependent Care Credit

  1. Your child must be below age 13, your legal dependent, and live in your residence for more than half the year
  2. If you are married, you and your spouse must both be working, but if your spouse doesn’t work but is a full-time student or disabled and incapable of self-care, you can still qualify

What kind of camps, you ask? The only rule is no overnight camps. The credit helps working people care for their kids during the work day, so summer camps where kids stay overnight aren’t eligible for this credit. Other than that, it doesn’t matter what kind of camp: soccer camp, chess camp, summer school, or even simple daycare. All of them are eligible expenses for this credit.

While summer day camp costs are a common way to use this credit, any cost to care for your children while working may be eligible. For example, paying a daycare center, a housekeeper, or a babysitter to care for your child while you are working qualifies. You can even pay a relative to care for your child and claim the credit for that expense, as long as the relative isn’t your dependent, minor child, or spouse.

A tax break for parents

You can claim a minimum credit of $600 for one child on up to $3,000 in expenses or $1,200 for two or more children on up to $6,000 if your adjusted gross income (AGI) exceeds $43,000. If your AGI is less than that, the credit per child scales up to $1,050 and $2,100, respectively.

The Child and Dependent Care Credit is just one of many possible tax breaks for children and dependents. Call if you have questions about this credit or want to discuss other tax savings ideas. Contact our RRBB accountants and advisors if you have questions or need further assistance.


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