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Child Day Care Expenses May Qualify for a Tax Credit

June is almost over, and for many working parents that means their children have been enrolled in a summer day camp for the past few months. Summer camps come in all shapes and sizes – some focus on athletic activities and others offer technology-based curricula – but all that fun isn’t free: this form of day care usually costs money. That last point is exactly what the IRS addressed this week when it released a “Special Edition Tax Tip”: the agency reminded taxpayers that summer camp expenses, like paid day care, may qualify busy parents for a tax credit. The IRS lists ten different things that parents paying for summer day camp need to know about claiming the Child and Dependent Care Credit: 1. Care for Qualifying Persons. 2. Work-related Expenses. 3. Earned Income Required. 4. Joint Return if Married. 5. Type of Care. 6. Credit Amount. 7. Expense Limits. 8. Certain Care Does Not Qualify. 9. Keep Records and Receipts. 10. Dependent Care Benefits. If one of your clients intends to claim this credit by filing Form 2441, Child and Dependent Care Expenses, let them know that the Child and Dependent Care Credit is not seasonal and may be claimed for any type of care that qualifies. It’s also important to note that the applying taxpayer must earn wages, salary, tips, or have self-employed earnings, qualifying dependents are – usually – less than 13 years old, and summer school tutoring expenses do not qualify. Source: Internal Revenue Service

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