Summer is finally here. While the kids are thrilled, mom and dad are sometimes scrambling to find a summer day camp and how to pay for it. The best way is to use your dependent care FSA. If you or your spouse’s employer has an FSA available you should be setting aside money for summer day camp or after school care all year. This money is deducted pre-tax and will decrease the amount of income tax you pay in throughout the year. The bonus is that the entire amount that you have elected to contribute to this account will be available to you immediately whenever your plan year starts (for most employees that is January 1).
If Your Employer Doesn’t Offer an FSA
You may be able to claim the Child and Dependent Care Credit if:
- Both parents are working
- One parent is working while the other is looking for a job
- One parent is working while the other is attending school full time
- Your child or children are younger than 13
- The child only attends during the day
- You file married filing jointly (if your filing status is married
You can not deduct this credit unless you have the income to deduct it from. The total credit you can use in a year is limited per child/per year.
Every Family is Different
The IRS recognizes that every family is different and has prepared a tool to help you determine if you are eligible for a tax credit https://www.irs.gov/help/ita/am-i-eligible-to-claim-the-child-and-dependent-care-credit. They have also published a special guide of exceptions that can be found at https://www.irs.gov/publications/p503.
Here to Help
If you believe that you qualified for this tax credit on a tax return filed within the past three years and would like to amend your return we are happy to help. For a free consult call 561-293-3135 or https://fasttaxhelp.org/fast-tax-help-form/. Our Enrolled Agents have more than 29 years of experience dealing with the IRS.