Summer can be a delightful and exploratory time for children. I know I have fond memories of taking my children to swim lessons, art camps, and Vacation Bible School. However, keeping your child entertained during the summer can also prove expensive. With that in mind, it may be comforting to know that summer day camp costs qualify for the dependent care tax credit.
The credit can also be claimed for expenses associated with reading or study camps. You can also use the credit to cover expenses associated with daycare centers, before or after-school programs, babysitters, or other care providers that you employed to care for a qualifying child under the age of 13 or for a disabled dependent. However, costs related to summer school, tutoring, or overnight camps do not qualify for the dependent care credit.
For 2023, taxpayers can claim up to 35% of $3,000 in eligible childcare costs for a single child or dependent. Taxpayers can claim up to 35% of $6,000 in eligible childcare costs for two or more children or dependents. Accordingly, the maximum dependent care tax credit is $1,050 for one dependent and $2,100 for two or more dependents. The full credit is available to taxpayers with adjusted gross incomes (AGIs) of up to $15,000. A partial credit is available to taxpayers with AGIs between $15,000 and $43,000. Taxpayers with AGIs above $43,000 can claim a 20% credit, with a maximum potential credit of $600 for one dependent or $1,200 for two or more dependents.
In order to claim the credit, you must incur expenses while caring for children under the age of 13 or while caring for qualifying relatives. You must have incurred childcare expenses while working or looking for a job, and you must be able to provide the care provider’s tax ID number. With that in mind, if you send your child to day camp, make sure to save the receipts as well as to write down the camp’s tax ID number. Finally, if you incur expenses while caring for a qualifying relative that is not a child, you can only claim the dependent care credit if the relative has lived with you for longer than six months and if they are unable to care for themselves.
Feel free to contact Elm3 at 678-297-9500 if you have any questions about claiming the dependent care credit. We hope your child enjoys their summertime!
