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What is Child and Dependent Care Credit?

By Laura Strachan, Esq. on August 02, 2010 | Last updated on March 21, 2019

The ubiquitous back to school campaigns serve as a constant reminder that the end of summer is quickly approaching. One way to help pay for new school supplies is to have the IRS help pay for your summer babysitting expenses. Yes, you heard right. The popular Child and Dependent Care tax credit can help your pocketbook by allowing for dependent care deductions that include summer day camps.

Generally speaking, most types of child day care will qualify for the credit, but there are some notable exceptions. Where summer day camp programs qualify for the credit, an overnight camp does not, according to the Kansas City Star. So yes, those summer day camps that you send your children to can help you save money come tax time. Even camps specializing in a sport or skill (such as soccer camp or computer camp) qualify for the credit. Also, a family day care, home, or church falls under the Child and Depdendent Care credit, but if the taxpayer receives free child or dependent care, then that care will not qualify.

The basic breakdown of the credit allows a taxpayer to claim up to $3,000 for one dependent and $6,000 for two or more qualifying dependents for expenses relating to child care. Too good to be true? Well of course, gross income of a parent (or parents) can serve as a limiting factor. Currently, income cannot exceed $100,000 for a single taxpayer in order to claim the credit. In order to qualify as a dependent, it must be a child 12 years or younger or an adult that is physically or mentally incapable for caring for themselves.

Allowing deductions relating to summer camp is a great way to keep your child and dependent care options open in the summer, and hopefully allow parents to feel expansive rather than limited in their summer options. There is one final step in the equation ... you actually have to take the steps to file for tax credits and deductions. As with other credits and deductions, the IRS does not do this for you, so keep track of these expenses as the time draws closer for accounting for them.

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