Summer is finally here and even though you may have been looking forward to it there is a pressing and present issue you can not afford to overlook: who is going to look after your child now that school is out (presuming work is not out for you!)? Typically parents who don’t have available supervision at home like to take their children to Summer Day Camps and pay for the cost of day camps. If this applies to you, you may benefit from Child and Dependent Care Credit. The following are 10 facts to keep in mind about the Child Dependent Care Credit:

      1. The expenses must be for the care of one or more qualifying persons. A dependent child or children under age 13 usually qualify.
      2. The expenses must be related to work. Meaning you are paying for day camp in order to attend work or in order to look for work. This also applies to your spouse if you file a joint return. Your spouse meets this rule during any month he/she is a full-time student, or he/she is physically or mentally incapable of self-care.
      3. You must have earned income such as wages, salaries, and tips. If your spouse is a full-time student or incapable of self-care they are treated as having earned income. Keep in mind that net earnings from self-employment also count.
      4. Be aware that if you are married you must file a joint return to be able to take the credit. But on the other hand if you are legally separated or if you and your spouse live apart then you do not have to file a joint return and may be eligible for the credit.
      5. You may be eligible for this credit if you pay for care at a day camp, at home, or at a daycare facility.
      6. The way the credit is calculated is by taking a percentage of the qualified expenses you pay. Depending on your income it can be as much as 35 percent of your qualified expenses.
      7. There are limits towards ho much credit you may claim in a year. The limit is $3,000 for one qualifying person or $6,000 for two or more.
      8. Keep in mind there is a difference between day camp and overnight camp, overnight camp does not qualify. You can’t include the cost of care provided by your spouse or your child who is under age 19 at the end of the year. You also cannot count the cost of care given by a person you can claim as your dependent.
      9. It is of utter importance that you keep receipts and records for all expenses. Make sure you are able to obtain the name, address and Social Security number or employer identification number of the care-provider. You will need this information when claiming the credit on your tax return.
      10. The most important part of child and dependent care credit is that it you may not only be able to claim it during the summer but all-year-long as well.
Remember if you have any questions always speak to your accountant or visit the IRS website www.irs.gov