Certain summer day care expenses may qualify for an income tax credit. Many parents who work arrange for care of their children under 13 years of age during the summertime. Those expenses may help you get a credit on next year’s tax return.
Here are six facts the IRS recently released in its Summertime Tax Tip 2010-01. The Child and Dependent Care Credit is available for expenses incurred during the days of summer break and throughout the rest of the year.
- The cost of day camp may count as an expense towards the child and dependent care credit.
- Expenses for overnight camps do not qualify.
- If your childcare provider is a daycare facility outside the home, you can get some tax benefit if you qualify for the credit.
- The actual credit can be up to 35 percent of your qualifying expenses, depending upon your income, and it does not phase out totally for high income taxpayers.
- You may use up to $3,000 of the unreimbursed expenses paid in a year for one qualifying dependent or $6,000 for two or more qualifying dependents to figure the credit.
- Both parents must have earned income during the tax year to qualify for the credit.
Be sure to keep track of your qualifying expenses. Request receipts for camp and day care fees paid. You will also need the full name, address and taxpayer identification number of the service provider at tax time.
If you have any questions regarding the The Child and Dependent Care Credit or any other tax issues that we can assist you with, please call our offices at (215) 665-3960 and ask to speak to one of our shareholders or email us at info@taxwarriors.com.