You can claim the cost of your child’s summer camp as a dependent care expense if:

  • the camp is essentially providing child care so that you and your spouse can work (or look for work),
  • it is a day camp (sleepover camps are considered a luxury), and
  • the child is under 13.

You can claim expenses of up to $3,000 for one child or $6,000 for two or more children.

The expense claimed is limited by the lesser of the earned income of the two spouses. For example, if one spouse’s annual income is $5,000, you cannot claim the full $6,000 expense for two children.

The claim is made on line 48 of the 1040. You must include IRS Form 2441: Child and Dependent Care Expenses.

The tax credit received is 20% of the dependent care expense if your Adjusted Gross Income is greater than $43,000. The percentage credit rises if the AGI is lower.

Alternatively, some employers have a dependent care benefit plan which enables you to use pre-tax dollars to pay for summer care. If your tax bracket is higher than 20%, then the pre-tax route is the better bang for the buck. In addition, the dependent care benefit plan allows up to $5,000/year per family, whether it is for one or more children. Also, if you have two (or more) children and your childcare expenses exceed the $5,000 allowed under your employer’s benefit plan, you can claim the remaining $1,000 under the dependent care credit (for a total of the $6,000 allowed expense).

If Uncle Sam doesn’t recognize your marriage, then you might be able to increase your tax savings.  For example, if a gay couple has two children, and both parents work, then each parent could claim one child.  This enables each parent to file as head-of-household, which is favorable over filing as single. Furthermore, if both employers offer a dependent care benefit plan, then the family could have up to $10,000/year in allowable pre-tax dependent care expenses.  That’ll pay for a lot of s’mores.

IRS Publication 503: Child and Dependent Care Expenses

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By day, Helen engineers new materials to make computer chips cheaper, better, and faster. When the son goes down (pun intended), she writes about personal finance at Affine Financial Services.