Can Summer Camp Childcare Expenses Provide Tax Relief?

Aside from the enjoyment children receive at summer camp, parents may also benefit on their tax return by providing their children with this experience. Provided that IRS conditions are met, taxpayers can use these expenses toward a child tax credit on their federal return (line 2 of Form 2441).

The IRS sets forth certain conditions for using summer camp expenses as child tax credits. For taxpayers to claim this:

  • The expenses must have been for a day camp. Sleepaway camps do not qualify.
  • The expenses must have been for a child age 12 or younger
  • The camp must not have been operated by the child’s parent or someone that a taxpayer can claim as a dependent.
  • The child lived with the taxpayer claiming the child care tax credit for more than half of the year.
  • The purpose for sending the child to camp must have been so that the taxpayer—and spouse, if married and filing jointly—could work or look for work.

Camp expenses can qualify for the child care tax credit if they are specialized (e.g., camps that specialize in computers or soccer) are general. If the camp provides transportation, expenses for such transportation may also qualify.

Childcare Tax Credits and the IRS, in General

Taxpayers that send children to camp and qualify in accordance with IRS requirements should be aware of the following

A taxpayer—and spouse, if filing jointly—must have earned income from wages or salaries, either from employment or self-employment, to qualify for the child tax credits. Note that a parent who is a full-time student or is physically or mentally unable to care for him- or herself is considered to have earned income for this purpose.

The taxpayer’s filing status must be single, married and filing jointly, head of household, or a qualifying widow(er) with a dependent child to qualify for this tax credit. A “married and filing separately” status will disqualify a taxpayer.

Depending on income, the child care tax credit may be up to 35 percent of childcare-related expense. There is a cap of $3,000 on expenses paid in a year for one child and $6,000 for two or more children.

If a taxpayer’s employer provides childcare benefits, and the taxpayer excludes that benefit from his income, the taxpayer must deduct the amount of employer-provided benefits from other qualifying childcare expenses.

Taxpayers who have children age 12 and under, live with those children for more than half of the year, send them to a day camp, and are working or looking for work are most likely eligible to use summer camp costs towards a child care tax credit on their tax return.

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