When tax season rolls around each year, we often have parents calling to inquire about Rockbrook’s Federal Tax ID, presumably to list the camp on their tax returns. They hope their summer camp expenses can be written off, that they can receive some kind of tax deduction for what they spent sending their children to camp. While we are not tax accountants here at Rockbrook, we can at least summarize what we know and point you to other resources we think might be helpful. There is a certain amount of confusion revolving around this issue because some, but not all, camp expenses qualify as “Child and Dependent Care Expenses.”
First of all, the IRS document that spells this out is Publication 503, Child and Dependent Care Expenses. It identifies who can claim the credit, how to calculate it, and most importantly for us, what sorts of childcare providers qualify. The question is, does Rockbrook qualify as a childcare provider? If so, and assuming you qualify in other ways (e.g., the “qualified person test,” both parents working, etc.), you may be able to claim between 20% and 35% of your allowable childcare expenses— up to $3,000 per child or $6,000 per family.
Do overnight camp expenses qualify for a tax deduction?
Unfortunately, it appears that Rockbrook does not qualify as a child care provider for a rather simple reason. We are an overnight, sleepaway camp. The IRS is clear on this; while “the cost of day camp may count as an expense towards the child and dependent care credit, expenses for overnight camps do not.”
The logic here is that this deduction is meant for child care expenses accrued because both parents are working (or looking for work), and hence a day camp is legitimately providing childcare during working hours. Yes, overnight camps provide that too, but overnight camp fees also cover childcare when the parents are not working, i.e. at night. Perhaps a portion of overnight camp expenses should qualify as “work-related,” after all Rockbrook is taking care of your children while you work in the summer, but that is not how the current tax code reads.
Again, we are not tax experts, so please do not take this as advice. Your tax professional may have a different point of view, and certainly there may be exceptions and other restrictions to consider.
To read more, here are a couple of resources to consider. Both do a nice job of discussing the restrictions, and both mention overnight camp expenses not qualifying.