Child, Dependent Care Credit Reduce Child-Rearing Expenses

Summer day-camp expenses for a child or dependent may qualify taxpayers for the Child and Dependent Care Credit.

The credit, which varies based on income, is intended to help reduce expenses involved in raising a child or caring for a dependent.

The tax break applies, for example, to qualified expenses for a dependent child under age 13 to attend day camp, but not overnight camp. To claim the expenses, the taxpayer and spouse, if married, must be working or job hunting while the dependent attends the camp.

More than 500,000 taxpayers claimed nearly $152 million in New York State Child and Dependent Care credits for the 2016 tax year. The average amount claimed was more than $304.

Taxpayers must provide proof of how much money they spent on summer day-camp to support their claim for the tax credit. Appropriate records to keep include copies of cashed checks that were written to and cashed by the summer camp or an itemized statement issued from the camp listing each payment received. The state Tax Department will not accept the following proof of money paid by someone else like a friend or relative directly to the summer camp; handwritten receipts that weren’t issued at the time of payment and can’t be verified by the Tax Department; a statement that the taxpayer made cash payments or the camp received cash payments submitted without additional supporting documentation. Documents do not need to be scanned; taxpayers can use their smartphone to take a digital picture.

To claim the New York state credit, taxpayers must first qualify for the federal Child and Dependent Care Credit. The New York state credit ranges from 110 percent of the federal credit, for taxpayers with incomes under $25,000, to 20 percent if their income is more than $150,000. Dependent-care benefits from an employer will reduce the credit amount; such benefits are included on a taxpayer’s W-2 form.