If you are a parent with the first child off to summer camp, you must know that summer camp expenses may result in tax breaks as child care credit. But like all forms of tax breaks, you should know the rules and restrictions related to summer camp so as to take advantage of them. Here are a few of the crucial things in this matter.
Day Camp Can Qualify
The good news is that chess camp, lacrosse camp, and theater camp, among other types of day camp, qualify as a tax credit. You are neither required to choose the cheapest option nor encouraged to seek the most expensive option – the latter isn’t advisable anyway since it’s a limited credit – but you have the choice of sending your child to the sportiest, geekiest, and artsiest camp you can find.
Overnight Camp Is Out
Keep in mind that for summer camp expenses to be considered as tax break, these must be world-related. Under this restriction, overnight camp is not qualified for the credit even when it was made as part of your child care plans when pulling off graveyard shift.
Unemployed Spouses Cannot Claim the Credit
This is an unpopular restriction but the law has clear rules about it. Since the child care credit must be made for work-related purposes, you and your spouse, if you are married, can claim the summer camp expenses if and when these allow both of you to work or look for work. But when you failed to find a job or you failed to earn income from taxable employee compensation (e.g., salaries, wages, and tips) and/or self-employment net earnings, then you cannot claim the credit.
Be Aware of the Forms
When in doubt, ask your tax consultant at H&R Block about the forms that must be used in claiming the tax credit – the forms matter, after all. In general, you have to attach Form 2441 with Form 1040, 1040A, or 1040NR to claim the credit – and you cannot claim it in case you filed Form 1040NR-EZ or Form 1040EZ. You should also include the information about your child’s Social Security number since you may lose the tax credit otherwise.
Of course, you can only claim the credit if and when the child is considered as a qualifying person that, in most cases, means your dependent child under 13 years of age (exceptions apply). You may not claim the credit, for example, even when you paid for your nephew’s summer camp tuition or your best friend’s son’s expenses.
