Enrolling Children in Day Camp Can Reap Tax Benefits

Summer has just started, but many Southern California parents are already wondering how they’re going to keep their children busy for the next several hot and sweaty weeks of summer without breaking the bank.

One possibility: Send the kids to camp, and cash in on an often-overlooked tax benefit.

Many parents don’t realize that paying for summer day camp can qualify them for the federal Child Care Tax Credit.

The credit offers between 20 percent and 35 percent of the cost of qualifying camps, up to $3,000 for a single child or $6,000 for two or more children.

Depending on camp costs and family income, that could reduce tax liability by up to $1,050 per child.

At Camp Encino, which is operated by the Los Angeles Departments of Parks and Recreation, director Jaqueline Koci said her staff makes receipts available for parents to submit to the IRS at tax time.

The NBC4 I-Team found some parents had no clue about the potential benefit, but loved the idea.

"I think it's a great opportunity for families,” said Pasadena resident and father Justin Hilliard. “They can afford more food, to do more things."

To qualify, children must be 13 years old or younger. Both parents must be employed, or looking for work.

Also, the costs of overnight camps don’t qualify.

For more information on the child care tax credit, visit the IRS website on summer day camp expenses here.

More summer tax breaks you should know about:

• Solar Tax Credits: The IRS offers a tax credit of 30 percent on what you pay to purchase qualifying solar energy systems. Other subsidies and tax breaks at the federal and state level may be available.
• Rent Your Home Tax-Free: If you’re going on vacation, you can rent your home for less than 15 days without treating the profits as rental income (check laws in your area about short-term rentals).
• Summer Yard Sales: Most profits from yard sales are tax-free, if used items are sold for less than you paid for them.
• Summer Jobs & Taxes: Teens can make up to $399 from odd jobs like baby-sitting and mowing lawns without paying self-employment taxes.