Summer isn’t too far away, and many parents are wondering if they can afford to send their kids away to summer camp this year. The ability to take a tax deduction for such expenses could make all the difference.
Some of the expenses for summer camp, like medical expenses, are tax deductible, according to Ellen Minkow, CPA, of MS 1040 LLC in New York City.
That includes the cost of shots, physical exams and fees for doctors. “These are deductible if you itemize on Schedule A and only to the extent that the total medical expenses paid during the year exceeds 10 percent of adjusted gross income (AGI), and 7.5 percent if you or your spouse is over 65,” she pointed out. “Not deductible are sports equipment, clothing, fans or furniture. If there are transportation costs associated with summer camp—whether by bus, subway, taxi or car—the costs may qualify as an expense for purposes of the credit if the camp takes the child to or from the place where the child care is provided. However, the costs that you spend on your own transportation to get your child to summer camp will not qualify as an expense for purposes of the credit.”
While sleepaway camp does not count for the child care credit, day camp could, according to Minkow. For a camp or daycare facility to qualify, parents must add the camp’s federal ID number and address to the Form 2441 or the camp will not qualify for the credit, she noted.
“In addition, to qualify for the credit, you must pay child and dependent care expenses so that you and your spouse, if married, can work or look for work,” Minkow added. “However, if you don’t find a job or if you don’t have any earned income from wages, salaries, tips, other taxable employee compensation or net earnings from self-employment for the year, you may not claim the credit. On the actual credit, there is an exception to earned income for taking the credit. The exception is for a student or disabled spouse. If one spouse is a full-time student or disabled, earned income is deemed to be at $250 per month with one qualifying child to $500 for two or more. Other exceptions do apply.”