MILLIONS of working parents who can’t afford childcare during school holidays can earn additional tax credits when their child goes to summer camp.
Paying for childcare isn’t easy for many people – unless you have friends or relatives to lean on – and it’s even harder when schools are closed.
Summer camps are a popular way to keep kids entertained and supervised during vacations, but they can get expensive.
Tuition for day camps can range from $199 to $800 per week, according to the American Camp Association.
These costs can be even higher if there is more than one child to care for.
Almost half (45%) of parents surveyed by Bankrate in 2021 said they would pay for childcare in the past year, and 19% of them said they would expect to pay up to $1,000.
Many said they didn’t know how to make ends meet or that it would take on credit card debt to do it.
But there is help for families who want to send their children to the camp or have already sent them.
What are the child and care credits?
The child and caregiver tax credits are designed to help parents pay for childcare costs while they are working or looking for work.
Individuals may claim up to 20% of up to $3,000 in annual childcare expenses for a child under the age of 13 for the 2022 tax year.
The same threshold is 35% up to $6,000 for two or more children.
The credits can also be claimed for a spouse or dependent of any age with disabilities.
What were the credits worth in 2021?
The benefit was expanded in the 2021 tax year as part of the American Rescue Plan.
That means people can charge up to $4,000 for childcare they paid for last year, or up to $8,000 for two or more children.
It’s also been made fully refundable, so parents and guardians can claim the credit even if they don’t owe federal income tax for 2021.
The IRS has confirmed to The Sun that the extension applies only to the 2021 tax year.
However, people who have applied for an extension of their 2021 tax returns have until October 17 this year to file them.
The original deadline for filing your taxes was April 18, 2022.
That means you still have the option to claim up to $8,000 in tax credits.
You won’t get the benefit for 2021 until you file your taxes that year.
Summer camp costs paid in 2022 can be claimed next year.
Who is Eligible?
The tax credit is aimed at working people, but full-time students and people who were unemployed for part of the tax year are also eligible.
It is calculated from your income and a percentage of the expenses you incur while working or studying.
You must either be working, looking for a job, or studying full-time to claim the loan.
If you are married, the same rule applies to your spouse, but they do not need to have an income from work if they are unable to work due to a disability.
You must also have lived in the United States for more than half the year and paid more than half the maintenance of the home where you live with your child or dependent.
Special rules apply to military personnel living abroad.
If you are divorced or separated, the parent who has custody of the child can claim the tax benefit.
Full credit begins to expire when your Adjusted Gross Income reaches $125,000 or more.
For the 2021 tax year, households with incomes of $438,000 or more will have their credit phases fully phased out.
Here’s how to claim your kids’ summer camps
If you sent a child to summer camp this year, you may be able to use the tax credit to help cover some of the cost.
Credit applies to care provided by a babysitter or licensed care center.
This means that day camp fees are eligible if the camp was selected to provide care while the parent or parents were at work.
This also applies to camps that focus on sports and activities.
Overnight camps are not eligible.
You must provide the name, address and tax identification number (TIN) of the person or camp who provided the care.
Account for details of how much your summer camp expenses were, then fill out a 2441 form and attach it to your tax return.
We also round out the states with their own child tax credit programs.
Also, check out the 45 states and cities that offer up to $18,000 in monthly direct payments over two years.
https://www.the-sun.com/money/5928440/tax-credits-summer-camp-childcare-help/ Families can get up to $8,000 in summer camp tax credits — see exact date by which to apply