Sun, Splash, and Savings: How Day Camp Could Trim Your Tax Bill

The sunscreen is out, the schedules are filling up, and parents everywhere are doing the math on summer childcare.

Day camps are a lifeline—but they’re not cheap. The good news? The tax credit designed to help working parents just got a meaningful upgrade, and this summer is the first time you’ll truly feel it.

Here’s what’s new, what still applies, and how to make the most of it.

The Credit Got a Raise for Some Families

The Child and Dependent Care Credit has long helped offset the cost of care for working families. For 2026, recent legislation increases the maximum credit rate from 35% to 50%, depending on a taxpayer’s adjusted gross income.

The expense limits remain the same: $3,000 for one qualifying dependent and $6,000 for two or more. What changes is the percentage used to calculate the credit. At the new maximum rate, the credit could be worth up to $1,500 for one qualifying dependent or $3,000 for two or more.

That maximum benefit will not apply to everyone. The 50% rate applies to taxpayers with AGI of $15,000 or less. As income rises, the credit rate gradually phases down, eventually reaching the minimum rate of 20% for higher-income taxpayers.

Does Day Camp Count?

Yes, with one clear line in the sand. If you send your child to a local soccer or art day camp so you can work, that tuition counts toward your $3,000 or $6,000 limit. You cannot, however, claim the cost of overnight camps — the IRS explicitly excludes overnight camp expenses, even if the camp frees you up to work during the week.

Who Qualifies?

The core eligibility rules remain unchanged:

• Age: Your child must be under the age of 13 when the care was provided. The moment your child turns 13, expenses incurred for their care for the remainder of the year no longer qualify. There is an exception for dependents of any age who are physically or mentally incapable of self-care.
• Work requirement: The care must be so you—and your spouse, if filing jointly—could work or look for work. If one spouse is a full-time student or disabled, exceptions apply.
• Qualified provider: The camp must be run by someone other than your spouse or a person you claim as a dependent.
  

Using a Dependent Care FSA? Read This First.

Starting in 2026, you can contribute up to $7,500 to a dependent care FSA (up from $5,000), or $3,750 if married filing separately. That’s a welcome increase, but coordinate carefully: FSA funds reduce your CDCC expense limit dollar-for-dollar, so using both benefits strategically matters.

How to Claim It

To successfully claim this credit, you must file Form 2441, Child and Dependent Care Expenses, attached to your Form 1040. You’ll need your care provider’s name, address, and taxpayer identification number (TIN or EIN), so ask the camp for that information at registration, not in at the tax deadline.

Make It Work This Summer

Before you finalize camp plans, confirm the camp qualifies, collect their tax ID, and keep every receipt. If your state offers its own version of this credit, you may be stacking savings. A tax professional can help you map out the most efficient combination of FSA contributions and the credit for your income level.

Always consult a tax professional and refer to the latest IRS guidelines to confirm your situation qualifies.