My son starts summer camp tomorrow. And this is what I have learned as a parent about summer camp: it’s expensive. Super expensive.
Last week, I took all three kids to Dick’s Sporting Goods to stock up on camp items: shin guards, mouth guards, cleats, shin guard covers (who knew?), new hockey stick… The list for all three was pretty long. Long enough that I had to put the shiny new Mizunos that caught my eye back on the shelf; they’ll have to wait. This trip was all about stocking up on camping equipment for the kiddos. And it was insane.
I happened to run into a mom that I knew at the store. Her cart was piled higher than mine. Her son was headed to football camp and apparently the requirements for pads and other gear were completely different from what he wears during the regular season. So, she, like me, was spending more than expected to get him ready.
When it comes to taxes, there is good news and bad news to be had with respect to summer camp.
I’ll give you the bad news first: almost everything that you bought in order to send your kid to camp is non-deductible. That includes:
- Sports equipment. It’s personal in nature and not deductible, even if it’s required.
- Clothing. Again, it’s personal in nature even if specifically required. And yes, even if those are clothes that your child would never, ever wear outside of camp.
- Fans and furniture for overnight camp. Still, personal in nature and not deductible.
Now for the good news: some of the expenses involved in simply getting ready for camp are deductible. That includes:
- Physicals. The cost of a physical or well exam is deductible; you do not have to be sick in order for the visit to be deductible.
- Shots. Vaccines and immunizations are considered preventative care and are deductible.
- Fees for doctors. Most doctors charge a fee to complete forms for camp now. If those are part of your medical care, they are deductible.
Remember that medical expenses are deductible only if you itemize on a Schedule A and only to the extent that the total medical expenses paid during the year exceeds 7.5% of your adjusted gross income (AGI). You’ll find your AGI on line 37 of your federal form 1040:
And more good news: some of the costs of camp may qualify as child and dependent care expenses. Those expenses can be used to claim a credit on your federal form 1040 at line 48:
Credits are desirable because they are dollar for dollar reductions in the amount of tax due. In comparison, deductions are simply reductions in your taxable income.
To claim the child and dependent care credit, you must have qualifying expenses. Generally, that means that the expenses must be used for child and dependent care of a qualifying child while the child’s parent or parents work or look for work. The amount of the credit is based a percentage of work-related expenses and can be up to 35% of your expenses.
Following are some tips for sorting out how camp expenses might (or might not) qualify:
- Overnight camp is fun for the parents but doesn’t qualify for the credit. I enjoy a break away from the kids overnight as much as the next girl. But for tax purposes, the cost of sending your child to an overnight camp is never considered a work-related expense for purposes of the credit.
- Soccer camp might be okay. Ditto for Legos and drama camp. The cost of sending your child to a day camp may be a qualifying expense even if the camp specializes in a particular activity. You’re not required to choose the cheapest child care option (not that you have to seek out the most expensive, either, since the credit is limited) so feel free to send your kid to the geekiest, sportiest, most dramatic, most artsy camp you want.
- Tax forms matter. To claim a credit for child care expenses, you’ll need to attach a federal form 2441 (downloads as a pdf) to a federal form 1040, federal form 1040A, or form 1040NR. You cannot file a federal form 1040EZ or federal form 1040NR-EZ and claim the credit.
- Stay at home and unemployed spouses (unless looking for a job) make you ineligible for the credit. Okay, this is unpopular. But it is what it is. The child care credit is classified for tax purposes as “work-related.” To qualify for the credit, you must pay child and dependent care expenses so that you and your spouse, if married, can work or look for work. However, if you don’t find a job or if you don’t have any earned income from wages, salaries, tips, other taxable employee compensation or net earnings from self-employment for the year, you may not claim the credit.
- As much as I’d love for you to, you can’t pay for my kids to go to camp and claim the credit. For tax purposes, expenses that you pay for summer camp must be for child considered a “qualifying person.” In most cases, this means your dependent child under the age of 13 (some exceptions apply). It may be appealing to ship off your neighbor’s kids, your best friend’s kids – or those of your favorite tax attorney – for the summer but those expenses won’t count for purposes of the credit.
- Find your kid’s Social Security card. To claim the credit, you must include your child’s name and Social Security number. I’ll be the first to admit that I haven’t memorized the Social Security numbers for all of my kids but I know where to look for them. You should, too. If you don’t have this information on your return, you may lose the credit. The same goes for an ITIN (more info on those here).
- Summer camp isn’t the same as setting up a tent in your backyard and calling it Camp Erb. You have to make payments to an actual child care provider who will be identified on your tax return by name, address and bona fide tax ID number. So, yes, that means paying above the table and reporting those payments appropriately. In addition, your summer camp provider cannot be your spouse, your qualifying child’s parent or your dependent; if the provider happens to be your own child, he or she must not be claimed as your dependent and must also be at least 19 years old by the end of the year.
- Ice cream is delicious but may not be a qualifying expense. Qualifying expenses at camp are those that focus on child care and do not usually include the cost of food and clothing (see above) as well as “extras.” However, if you can’t actually separate those costs out from the rest of the care – and if they are considered incidental to the care – you may be able to include them.
- Changing your mind is okay but won’t result in a tax break. Nobody signs up for summer camp in summer. It’s like applying for college: you have to start early. Many camps start filling up in January, so you have to send in deposits early. I don’t know about you but I’m not that organized… If your schedule changes or if you find a place your child likes better, that’s okay, but any money that you may lose because you’ve put it down as a deposit won’t qualify as a child care expense. Similarly, if you pay in full for camp early, you can’t include the cost as a child care expense until the child care is actually received.
- It’s not a donation if your kids don’t actually go to camp. What if you change your mind – as mentioned above – and your child doesn’t go and the payment is already made to a charitable organization (like the YMCA or church)? If the payment is not refundable, that doesn’t change anything: you can’t re-characterize it after the fact. Money is lost, lesson is learned. But if the payment is refundable and you choose to redirect it (meaning you tell the organization to keep it and use it as a donation), you may be able to re-classify the payment as a charitable donation. If that’s the case, get a receipt.
- Getting there may be half the fun but likely not a qualifying expense. If there are transportation costs associated with summer camp – whether by bus, subway, taxi or car – the costs may qualify as an expense for purposes of the credit if the camp takes the child to or from the place where the child care is provided. However, the costs that you spend on your own transportation to get your child to summer camp will not qualify as an expense for purposes of the credit.
For more about the child and dependent care credit and qualifying expenses, check out my new ebook at Amazon.com; through Hyperink or at Barnes and Noble. If you have specific questions or circumstances that might be a little out of the ordinary, be sure to check with your tax professional for more details.
Of course, there are still no tax breaks for water balloons, marshmallow sticks or lightning bug jars… But be sure to include those things in your plans anyway. Enjoy your kids – and your summer!
Security Tax Services LLC
North Sound South Sound
2802 Wetmore Ave, Suite 212 33530 1st Way S, Suite 102
Everett, WA 98201 Federal Way, WA 98003
425.339.2400 253.237.0751
fax 425.259.1099 fax 253.237.0701
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