WASHINGTON, D.C. — The Internal Revenue Service (IRS) has issued a timely reminder to taxpayers about the potential tax benefits associated with summer day camp expenses. These expenses may qualify for the Child and Dependent Care tax credit, providing a financial reprieve for working parents seeking care for children under the age of 13 during the summer months.
To be eligible for this credit, taxpayers must incur expenses to facilitate work, job searching, or school attendance. Unlike overnight camps, day camp expenses qualify for this credit, offering a unique opportunity for parents to offset costs. The IRS specifies that taxpayers must have earned income to claim this credit.
The credit allows taxpayers to claim up to 35% of qualifying childcare expenses, based on their income. For the 2024 tax year, the maximum eligible expenses are capped at $3,000 for one qualifying individual and $6,000 for two or more. It is crucial to note that reimbursed expenses, such as those from state social services, must first be deducted before calculating the credit amount.
Moreover, the IRS mandates that taxpayers list the name, address, and taxpayer identification number of the day camp on their tax return, unless an exception applies. IRS Publication 503 provides comprehensive details on the eligibility criteria and rules governing the Child and Dependent Care credit. This document also includes exceptions for certain taxpayers, such as those living apart from their spouse.
The IRS is encouraging taxpayers to utilize the Interactive Tax Assistant on IRS.gov to determine their eligibility for this valuable credit. By understanding and leveraging these provisions, taxpayers can effectively manage summer childcare expenses while enjoying potential tax savings.
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