Can you claim summer camp expenses for the dependent care credit? In many cases, the answer is yes.
If your child meets certain requirements, there is nothing in the tax code that says you have to find the least expensive day care in order to claim the dependent care credit, and summer camps are often just another form of day care.
But, in order to claim the credit, there are 6 requirements, (those shown here are very general as there are exceptions to every rule):
- The child must be under age 13 at the end of the tax year and qualify as a dependent on your tax return.
- The child must have lived with the taxpayer more than half of the year.
- Expenses must be work-related; that is to say that they are incurred so that the taxpayer and spouse can work or actively look for work. No credit is allowed if taxpayer has no earned income for the year.
- Expenses cannot be paid to relatives.
- Care providers name, address and social security number or EIN must be reported when claiming the credit
- Generally, you don’t qualify for the credit if your filing status is married filing separately.
So, that is a brief description of eligibility for dependent care credit. Let’s discuss what camp expenses can or can not be claimed.
- Overnight camp expenses generally can’t be claimed unless taxpayer required overnight care so that he/she or both could work.
- As noted above, you don’t have to find the cheapest day care to qualify, so specialized camps, such as soccer, lacrosse, chess or computers, etc. can qualify.
- Almost everything you bought to send your kid to camp is NOT deductible. Things like uniforms, sports equipment, clothing that wouldn’t be work out of camp, furniture, etc. are considered personal expenses and are not deductible.
- Notwithstanding what was said in preceding paragraph, medical expenses are deductible if you itemize. So if your child needed shots or you had to pay for doctors to complete forms, those expenses would be deductible, subject to medical deduction limitations (medical expenses have to exceed 10% of your AGI to be deductible).
- If you change your mind and lose your deposit, it is not deductible.
- We have seen where deposits were refundable but the organizations were considered charities so the taxpayer chose to redirect the refund to the charity. That is OK as long as you remember to get a receipt.
- Transportation costs may be deductible if the camp is providing the transportation (for example, they pick up the child each day and transport to camp by bus). However, costs you incur on your own transportation to get your child to camp is not deductible.
Finally, remember to keep those receipts.