"Ask the Expert:" Do Sleep-Away Camps Qualify for the Child Care Tax Credit?

Q: My daughter is attending sleep-away camp for the first time this summer. Will the camp’s cost qualify for the dependent-care tax credit?

A: Unfortunately, overnight sleep-away camps don’t qualify under the dependent-care tax credit, but other child care costs over the summer may be eligible.

Generally, you may qualify for the tax credit if your child is age 12 or younger and she attends daytime summer camp, day care, or is cared for by a babysitter or nanny so that you (and, if married, your spouse) can work or search for a job. During the school year, the cost of preschool, and before and after-school care programs also qualify.

If you’re married and file jointly, you and your spouse must have earned income to qualify for the tax credit. Earned income can come from wages, salaries, or other taxable employee compensation, or earnings from self-employment. Your spouse may be considered as having earned income if he or she is a full-time student, or if your spouse is physically or mentally unable to care for himself or herself. (If you’re married and file separately, you don’t qualify for the credit, period.)

How large a credit you may take depends on how many kids you have and how much you earn. Households with income of $43,000 or more can claim up to 20% of all eligible child care costs, for up to $3,000 for one child or up to $6,000 for two or more children in need of care. So, for example, if you have one kid and your summer camp costs more than $3,000, you may be eligible to claim up to $600. For two or more kids in child care, you may be eligible for a maximum credit of $1,200. Tax credits are more valuable than tax deductions, because they lower your tax bill dollar-for-dollar.

You can find more information on how to qualify for the dependent-care credit, and the forms you’ll need to apply at the Internal Revenue Service website.

If you don’t qualify for the dependent-care tax credit, consider enrolling in a dependent-care flexible spending account. You can save up to $5,000 in pretax earnings to pay for qualifying child care expenses (You can find a helpful list of what does and doesn’t qualify as child care here.