It's Summer…Can I Deduct My Child's Camp Costs?

Deductions and Credits
Child Tax Credits and Deductions for Summer Camp
Child Tax Credits and Deductions for Summer Camp

During the school year, depending on their age, your children are in after-day care at the local center or spend a couple of hours at home alone in the afternoon.  You keep the monthly child care center’s bills in your tax files for the child care tax credit on your next year’s tax return.

Now it is summer and you can’t leave the kids home alone all day while you work. It’s a mixed calendar. The first few weeks the kids are attending the local summer camp, for a couple of weeks they’ll be at the overnight camp a few hours away from home, and then the rest of the summer, your neighbor will be the “baby” sitter at your home. Are these summer expenses eligible for your child care credit?

The day camp expenses are eligible. If the camp costs include a fee for transporting your kid to and from the camp, that’s an eligible cost too.  Before the camp days are over, get the camp’s information (official name, address, and identification number) for your next year’s tax return. The overnight camp costs are not eligible for the child care credit. Sorry.

The dollars that you pay the neighbor can certainly be included in your child care costs.  Let the babysitter know that you will be listing her name, address, and social security on your tax return. And if you pay her more than $1,000, you may be a household employer.  If so, you may have to withhold and pay social security, Medicare, and federal/ state unemployment tax on your payments to the neighbor. Check out IRS Tax Topic 756 and IRS Pub 926 .

If any of your children turn 14 during the summer, you can still claim the child care costs up until the day they turn 14.  So if your son turns 14 on August 15th, you can still deduct his local camp costs through August 14th.

If you have your own business and your kids are old enough to do some work there, maybe you don’t need a sitter or camp this summer. You can employ your kids at a fair-market wage and deduct their wages as a business expense. If your business is a sole proprietorship or a partnership and your child is under age 18, the child’s wages are not subject to social security and Medicare taxes. You could also set up IRAs for them for $5,000 per year or up to their earned income, whichever is less and get their future savings started.

For more detailed information check out:

IRS- Child and Dependent Care Credit

IRS Pub 503 – Child & Dependent Care Expenses

IRS – Family Help in Your Business