News & Events

Summer Child Care Tax Credit 2017

-by Sue Sears, Senior Tax Manager

Are your kids attending camp this summer? If so, you may qualify for a federal child care tax credit that could lower your overall taxes. Of course there are guidelines as to what qualifies for the credit. Here are some of the more important criteria to consider:

Child Care tax Credit•  To qualify, your expenses must be for the care for one or more qualifying persons. Typically, your dependent children under the age of 13 qualify;
•  The cost for care is paid so you and your spouse (if you file a joint return) can work, or go to school;
•  You and your spouse (if you file a joint return) must have earned income during the time your child is at camp. One spouse may be a full-time student;
•  Credit is available if you are legally separated or living apart from your spouse; otherwise it can be claimed on your joint return;
•  Care at home, daycare or day camp qualify;
•  Overnight camps; summer school tutoring; care provided by your spouse or your child who is under the age of 19 at the end of the year; and care provided by a person you can claim as your dependent do NOT qualify for credit;
•  Keep all records and receipts for when you file your tax return. This includes name, address & taxpayer I.D. number of the care provider. Use tax form 2441 if you qualify for the credit;
•  Credit is based on your income and is worth between 20% and 35% of your allowable expenses;
•  There is an expense limit that you can use of $3,000 for one child or $6,000 for two or more children;
•  Special rules apply if you get dependent care benefits from your employer.

For the complete detailed outline as posted by the IRS [click here].

This article was previously posted, but has been updated to reflect any necessary changes for 2017.