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Tax break for day camp costs

By Kay Bell ·
Tuesday, August 17, 2010
Posted: 2 pm ET

Summer's almost over. Is that parents I hear cheering?

I'm not a mom myself, but my neighborhood is full of kids. And I know from my neighbors who have outside-the-house jobs, that summer is always a challenge.

Now I'm not saying that school is baby-sitting service, but from September to May, it sure helps parents out in that regard.

Camp is a similar godsend during the annual break between classes. Camp counselors keep the kids occupied so their folks can go to work knowing their offspring are being supervised.

Here's another great thing about camps. If you send your kids to a day camp, Uncle Sam will reimburse you for part of those costs.

No, he won't cut you a check now. But if you paid for your son or daughter to attend a day camp this summer, you can claim those costs as part of the child and dependent care credit.

A lot of parents take advantage of this tax break to help them cover costs of after-school child care. The IRS says day camp costs count, too.

Note the designation "day camp."

If you sent Jimmy or Janie to Camp Outinthewoods where they stayed overnight for a couple of weeks, that cost is yours alone to bear.

But if you dropped the kiddos off at a local day camp in the morning on your way to work and picked them up each evening, then you can use that camp's costs as part of your dependent care credit claim.

Credit rules apply in summer, too: Remember, though, before the tax credit will make you a happy tax camper, you have to follow its regular rules.

The first big requirement is that you enrolled your child in camp so you could go to, or look for, work. If you're a nonemployed parent and aren't looking for a job, but you just want to get the kids out of the house for a few hours each day, Uncle Sam understands but he won't help pay for your mental health break.

Also, the child attending the day camp must be younger than 13.

There also are monetary limits. You can count only up to $3,000 in expenses for one qualified dependent or up to $6,000 for two or more. Even then, you only get to claim up to 35 percent of the costs.

And these care costs are for expenses throughout the year, not just for the day camp participation.

Still, all of us will take every little bit of tax help we can get. So if your kids went to day camp this summer, find your payment receipts and put them in your 2010 tax return file so you can count them when you do your taxes next year.

The IRS has the formal requirements for the child care tax credit in Publication 503. And Bankrate's tax tip, "IRS can help you look after the kids," walks you through the credit in more (I hope!) understandable language!

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