If your child is under 13 years old, their summer day care expenses may qualify.

These are the rules:

·         Cost of day camp may count as an expense towards the child and dependent care credit.

·         Expenses for overnight camps do not qualify.

·         The actual credit can be up to 35 percent of your qualifying expenses, depending on your income.

·         You may use up to $3,000 of the unreimbursed expenses paid in a year for one qualifying individual or $6,000 for two.

The so-called “kiddie tax” has been expanded for 2008, and young adults may now be ensnared in its trap. The kiddie tax basically treats the investment income of children as if it were received by their parents. So instead of a child paying tax on the investment income at a low tax rate, the tax is computed in the parents’ higher bracket. In 2007, the kiddie tax applied only to taxpayers under age 18. For 2008, it applies to taxpayers who are either (1) under age 19 or (2) age 19 through age 23 and are full-time students.