The tax benefits of camp

Parents face many factors when deciding whether — and where — to send a kid to summer camp. 

Do the dates work with your family’s travel plans for the summer? Will your child miss out on a lot of sports or other activities at home? Will she make friends at camp?

Will you choose a camp that focuses on sports, religion, outdoor activities, academics or something else? 

And of course, one of the most important factors is … What will it cost?

Here’s something else to think about, and it affects the question of cost: Can the expense of summer camp help with your tax burden?

Yes, it can

If your son or daughter goes to a camp that’s academic in nature, part of the cost should qualify for a tax credit or subtraction from your Minnesota taxes. 

“Academic in nature” includes courses in such subjects as reading, math, science, history, fine arts and foreign language. It doesn’t include sports and athletic activities or religious instruction.

Before you hastily set up your own “summer camp” for an academic reading of Nancy Carlson books or create a course about the history of Star Wars fandom, keep in mind that instruction must be taught by a “qualified teacher.” The definition for that is pretty loose, but it can’t be a parent or sibling.

The camp has to be in Minnesota, Wisconsin, Iowa, North Dakota or South Dakota. 

Eligible for the tax break are the parts of the camp that include the instruction — so not food, transportation or lodging. 

Ask the camp operator for a breakdown of what’s eligible and what isn’t. 

Credits and subtractions

While we’re on the subject, you can go to the Minnesota Department of Revenue’s website to find out about lots of other education-related credits and subtractions.

Check it out before you file. Here are a few highlights:

  • Instructional materials including books, pens, paper, even art supplies. Save your receipts!
  • Fees for field trips
  • Tuition, including for private school, college classes that count toward high school graduation and summer school classes that are required for high school graduation. (The state does limit the tuition subtraction to $1,625 for each qualifying child in grades K–6 and $2,500 for each qualifying child in grades 7–12.)
  • After-school educational enrichment programs
  • Tutoring
  • Driver’s education classes.

There’s also a long list of expenses that do not qualify for a credit or subtraction, such as school lunches, school uniforms, books and materials used for extra-curricular activities or religious instruction, and testing fees for college-placement tests such as the ACT and SAT. 

Strangely, the department specifically notes that “Kleenex” isn’t eligible. Maybe someone tried that at some point. Also not eligible? Hardcover encyclopedias. But I’m guessing that one doesn’t come up too often.

More deductions

Most of us remember to deduct charitable donations, but here are a few other deductions many families are eligible for — but often don’t know about.

Don’t let these opportunities to save slip away:

  • The cost of medical insurance premiums that surpass 10 percent of your adjusted gross income (There’s no 10 percent threshold if you’re self-employed.)
  • Tax planning and investment costs
  • The cost of packing and moving if it’s for a new job 
  • Child-care costs, including babysitters
  • Home-refinancing costs.

Eric Braun is a Minneapolis dad of two boys and the co-author of The Survival Guide for Money Smarts: Earn, Save, Spend, Give for young readers. Send comments or questions to ebraun@mnparent.com.