End of Summer Tax Tips: Day Camp, Stimulus Checks

Tax Tips
By: Shelia Whorton

Tax Credit for Day Camp

Did you know that parents may qualify for a tax credit for sending their children to day camp? During the summer, many working parents arranged for the care of their children under the age of 13 by enrolling them in day camps.

The cost of day camp can count as an expense towards the child and dependent care credit. This does not include overnight camps. If your childcare provider is a sitter at your home or a daycare facility outside the home, you’ll get some tax benefit if you qualify for the credit.

Parents can receive 20% to 35% of non-reimbursed child and dependent care expense. This credit is up to $3,000.00 for one child and up to $6,000.00 for two or more children. The actual credit is also based on the parent’s income.  The 35% rate applies if the parent’s income is less then $15,000.00 and the 20% rate applies if the income is over $43,000.00.

For more information, read IRS Publication 503, Child and Dependent Care Expenses available on the IRS the website at www.IRS.gov.

Claim Your Economic Stimulus Payment

The IRS is still processing tax returns and issuing economic stimulus payments. However, since the process can take up to eight weeks, taxpayers are encouraged to file by October 15th to ensure they receive the payment prior to December 31st.

A person with no tax liability or no tax filing requirement may receive a minimum payment of $300.00. Married couples can receive up to $600.00 in addition to $300.00 for each qualifying child. To be eligible for credit, individuals must have at least $3,000.00 in qualifying income. Qualifying persons must file a form 1040A.

Qualifying income includes any combination of earned income, nontaxable combat pay, and certain benefit payment from Social Security, Veterans Affairs, and Railroad Retirement.

For more information, visit the IRS website at www.IRS.gov and the U.S. Treasury at www.treas.gov.

Shelia Hester-Whorton, MPA
Corporate Small Business Consulting