off Junior's summer camp costs
Can I deduct payments made for summer camp for
my school-age children as child care? -- Joe
care credit of generally 20 percent of the amount spent for
child care is available to two-earner families and single parents.
This tax break for child care costs is a credit, not a deduction.
A credit is a reduction of the total tax you pay, whereas a deduction
is a reduction to the income you pay tax on.
The credit can be higher than 20 percent at certain
lower income levels (under $43,000), but for most taxpayers that
can afford child care, the credit is 20 percent of the amount spent
for child care services.
The maximum amount of expenditures that qualify in
any one year is $3,000 for one child and $6,000 for two or more
children. These limits are up from the historical limits of $2,400
and $4,800 used in the past decade or so.
The creditable expenses have to be higher than the
wages of the lowest earning spouse. For example, in order to get
the 20 percent credit on $6,000 in child care expenses, both spouses
would have had to earn at least $6,000. If one spouse only earned
$4,000, then the credit would only be 20 percent of $4,000.
Child and dependent care expenses must be work related
to qualify for the credit: They must allow you to work or look for
work. To be work related, your expenses must be to provide care
for a qualifying person. You do not have to choose the least expensive
way of providing the care. Expenses are for the care of a qualifying
person only if the main purpose is the person's well-being and protection.
The cost of sending your child to an overnight camp
is not considered a work-related expense. However, a day camp, where
the primary purpose is to allow you to work, presumably would be
an eligible child care expense.