As the heat of the day increases so does the heat on your bank account. You need to work, the kids need to play. Summer camp to the rescue. There are ways of dropping the temperature via tax relief via Dependent Care Credit but keep your receipts! Equally important is to make sure that the activity or service provider is an approved deduction to avoid disappointment. You and your spouse (if married) must be working or looking for work, have a dependant younger than 13 and/or have a spouse or dependant who is physically or mentally unable to care for themselves.
The service providers that entertain and care for kids during the day and send them home daily are labelled Day Camps. Those that provide board and lodging, which you utilise, are called Overnight Camps. The daily refundable amount depends on your child’s age and which camp was attended and the capped claimable value.
Track the mileage to the qualifying activity too. Cooking, feeding and some housekeeping for the care and wellbeing of the caregiver also partially qualifies.
Placing your kids in a Day Camp while you run a marathon or work at a Church fete does not qualify.
Not surprisingly, your older child or spouse do not qualify as claimable babysitters, the government sees that as a duty they should be supplying – something to highlight to them maybe when they ask for a reward. Spouses, uncles, aunts, siblings and step-siblings are all excluded but, woohoo, you can use a niece or nephew. Phew. Any carer must be over the age of 19.
If the sitter takes the kids to the natural history museum, the mileage should be tracked there and back.
Sports And Arts
Another credit you, the commendable parent, can accrue is for your child’s participation in sports and arts activities (again: qualifying ones). The fitness credit is approximately double of the art one. It’s a great government initiative.
In addition to the receipts make sure you have the provider’s name, address, and Social Security number/Tax ID number. This information will be required when you fill out your tax return.
If you want to help in working through the expenses of then world-class holiday camps you have delighted your child with and the Cirque du Soleil performers you hired as babysitters give us call today and let us get you the best returns possible. Little Matt wants that trip to the moon next year.