Special Situations in Child & Dependent Care Credit
Summer School, Tutoring, Day Camp
•Costs of summer school and tutoring programs are not qualifying employment-related expenses because they are educational in nature.
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The rule that a dependent care center must comply with applicable state and local laws also applies to a day camp where more than six persons are cared for in return for a fee.
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A day camp or similar program may constitute a qualifying employment-related expense, even though the camp specializes in a particular activity, such as soccer or computers.
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The full amount paid for an education day camp that focuses on reading, math, writing, and study skills may be a qualifying expense.
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No portion of the cost of an overnight camp is an employment-related expense.
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Care Centers for Sick Children
The IRS declined, in final regulations, to specify that payments to sick care centers were a qualifying expense. Instead, the matter is to be determined on a case-by-case basis as whether the expenses would be employment qualifying or a medical expense.
Absence from Work
Generally, a taxpayer must allocate the cost of care on a daily basis if expenses are paid during a period in which a taxpayer is not employed or in active search of employment, but there is an exception for short, temporary absences. The final regulations eliminate the requirement that the temporary absence exception only applies to taxpayers who pay for care on a weekly, monthly, or annual basis.
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Only those costs that a taxpayer is required to pay during the absence (e.g., while ill or on vacation) qualify for the exception.,
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A safe harbor for a short temporary absence is an absence of no more than two consecutive calendar weeks.,
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Cost of care while a taxpayer is on short- or long-term disability leave under the Family Medical Leave Act, paid medical leave, or paid maternity leave are not employment-related expenses.
Shift Workers
Costs of overnight care and day care for parents who work at night and sleep during the day may be qualifying expenses.
Kindergarten Expenses
Kindergarten is considered a non-qualifying educational cost regardless of whether a child attends part-time or full-time. Similarly, qualifying expenses do not include the cost of sending a child to a private school even though the taxpayer lives overseas in a place where public education is unavailable.
Live-In Caregivers
The increase in the cost of utilities attributable to providing room and board to a caregiver may constitute a qualifying expense. Also see “CAUTION - FOR CARE IN THE TAXPAYER’S HOME” below.
Care Outside the Home
Costs for care outside the taxpayer's household of a qualifying individual who is a dependent or spouse incapable of self-care who regularly spends at least eight hours each day in the taxpayer's household may qualify for the credit.