Q&A: Tax credits for children's day camp

September 19, 2008

This year my wife began working full-time again, so we sent our 8-year-old son to summer day camp. Can we include the cost when figuring our child-care tax credit for 2008?

Q: My wife began working full-time again this year, so we sent our eight-year-old son to summer day camp. Can we include the cost when figuring our child-care tax credit for 2008?

A: Yes, as long as your son didn't stay at camp overnight. You can count up to $3,000 of unreimbursed child-care expenses for your son. (For two or more children under age 13, the expense cap rises to $6,000.) But if you receive tax-free, dependent-care benefits through an employer, you must subtract those benefits from your expense total before calculating your credit. Presumably, you and your wife will have more than $43,000 of adjusted gross income this year, so your credit will equal 20 percent of your expenses. That's a maximum of $600 for one child or $1,200 for two or more children. Although the amount may not seem generous, keep in mind that a credit cuts the actual tax you owe dollar for dollar, unlike a deductible expense, which just reduces your taxable income.