Summer Daycare Expense: Are They Deductible?

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As the kids head back to school and return to  their normal routine, you may be wondering if their summer day care or summer camp expense is tax deductible. While they were necessary in order to provide your kids with supervision during the summer, it’s hard not worry about the expense. Here’s a look at how the Child Care Tax Credit as it applies to summer camps and summer daycare.

Eligible programs:

  • Day camps. Overnight camps are not eligible per the IRS guidelines
  • Daycare
  • Babysitter costs

If your children are under the age of 12, you can deduct a portion of the program cost or tuition. Likewise if your child has a disability and is over the age of 12, you can also apply the credit to their summer daycare/day camp costs.  Parents of qualifying children with disabilities can also deduct the cost of medications, home health care, and doctor visits.

As a parent or legal guardian of a qualifying child, you must use one of the following filing statuses in order to be eligible for this credit: single, Head of Household, qualifying widow or widower with a dependent child, or married filing jointly.

Additionally, you must be either:

  • Be a full-time college student for at least five months during the tax year
  • Be working full-time
  • Be unemployed and seeking work

You must also meet the income guidelines for each tax year as established by the IRS. If your adjusted gross income for 2015 is $15,000 or less for example, you can claim up to 35 percent of child care expenses on your tax return. As your income increases, the deductible percentage decreases.

As with any tax deduction, you’ll need receipts and records to substantiate your claim at the end of the year; such paperwork will come in handy if the IRS comes calling. If you didn’t collect any receipts or other records during the summer, most daycare and day camp programs will be happy to provide them to you; just remember to ask well ahead of tax day.

Summer child care and day camps can be expensive, but if you and your child meet IRS guidelines, you could deduct up to 35 percent of the costs at tax time. Doing so will also lower your overall tax liability and provide much-needed help with summer child care expenses.

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