Summer Day Camp: Another Under-Utilized Tax Break

"Deep summer is when laziness finds respectability." - Sam Keen

As our weather has finally (maybe?) turned toward spring, we know summer is right around the corner. I want alert you to tax savings when it comes to summer day camps. Taking this information into account will help you plan your summer accordingly, as you think about signing your children up for this win-win opportunity.

Decisions, Decisions

Before we get to the tax part, a quick word on summer day camps.

You might have noticed I'm not saying just "summer camp". Traditionally, overnight summer camps have been a fun experience for kids, but without a doubt, day camps have grown exponentially across the U.S. as they are often cheaper and more convenient.

If you are curious about summer day camps for your kids or grand-kids, just Google "summer day camps in [your city]" and a plethora of options should come up for you to check out.

Summertime Taxes

Ready for the good news now?

The Child and Dependent Care tax credit directly applies to summer day camp costs. The tax credit covers up to $3,000 for one child and $6,000 for two or more.

However, you won't see a tax break for the exact same amounts you pay. Why? The tax credit you receive will merely be a percentage based on your annual income.

Some of these tax credits (like the Child and Dependent Care credit), the math and legal terminology can be confusing. But that's why I want to help with these blog posts .

Now, while the kids are away, make sure some cash can stay.

Worthy To Note

Lastly, it's important to note this summer day camp tax break only applies to children under 13 years old. The child also needs to be considered your dependent. And remember the break won't count towards overnight camps, only the growing-in-popularity day camps like we mentioned before. Both parents must be working (one can be self-employed).

As you gear up for seasonal sunshine and kids running rampant, know there is some cash (and sanity?) you could save ... all you need to do is send your kids to day camp and check with your tax pro. As always, there are subtleties with tax issues..

And remember the sunscreen.

BE THE ROAR not the echo®

Warmly, Janet