The IRS has issued a reminder that summer day camp expenses may be eligible for the Child and Dependent Care tax credit. This tax benefit is available to working parents who pay for the care of their children under 13 years old during the summer, allowing them to work, look for work, or attend school.
Unlike overnight camps, day camp costs can be counted towards the credit. Taxpayers must have earned income to qualify, and the credit is based on a percentage of their childcare expenses. Depending on income, the credit can cover between 20 percent to 35 percent of these expenses. For 2024, the maximum eligible expense is $3,000 for one qualifying person and $6,000 for two or more.
Reimbursed expenses, such as from state social services, must be deducted before calculating the credit. Additionally, the expenses used to figure the credit cannot exceed the taxpayer’s earned income, or if married, the smaller of the spouse’s income.
When claiming the credit, taxpayers must list the day camp’s name, address, and the taxpayer identification number unless an exception applies. IRS Publication 503 provides detailed information, and the IRS website offers tools like the Interactive Tax Assistant to help taxpayers determine their eligibility.
