Did you send your kids to summer camp this year? If you did, here is a great tax tip to know: those expenses may help you qualify for a tax credit.

Working parents and parents who are looking for work must arrange care for their kids under 13 years of age.

Here are 5 things a parent should know about a tax credit available for child care expenses incurred during the summer.

5 Things Parents Should Know About The Child Care Tax Credit

1. The cost of day camp may count as an expense towards the child and dependent care credit.
2. Expenses for overnight camps do not qualify.
3. Whether your childcare provider is a sitter at your home or a daycare facility outside the home, you’ll get some tax benefit if you qualify for the credit.
4. The credit can be up to 35 percent of your qualifying expenses, depending on your income.
5. You may use up to $3,000 of the unreimbursed expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals to figure the credit.

For more information check out IRS Publication 503, Child and Dependent Care Expenses. This publication is available at www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

This is a great tax tip because most parents aren’t even aware that summer day camp expenses may qualify them for the Child Care Tax Credit.

If you purchased a home in 2010, you may be eligible for the First-Time Homebuyer Credit. To be eligible for the tax credit you must be a first-time homebuyer or a long-time resident who purchased a new home. The purchaser must have been at least 18 years old on the date of purchase; for a married couple, only one spouse must meet this age requirement. A dependent is not eligible to claim the credit.

Meeting the Homebuyer Tax Credit eligibility requirements above does not necessarily mean that you will get it. Here are key tax facts the IRS wants you need to know about claiming the First-Time Homebuyer Credit.

First-Time Homebuyer Credit Tax Facts

• You must have bought – or entered into a binding contract to buy – a principal residence located in the United States on or before April 30, 2010. If you entered into a binding contract by April 30, 2010, you must have closed on the home on or before September 30, 2010.
• To be considered a first-time homebuyer, you and your spouse – if you are married – must not have jointly or separately owned another principal residence during the three years prior to the date of purchase.
• To be considered a long-time resident homebuyer you and your spouse – if you are married – must have lived in the same principal residence for any consecutive five-year period during the eight-year period that ended on the date the new home is purchased.
• The maximum credit for a first-time homebuyer is $8,000, half that amount for married individuals filing separately. The maximum credit for a long-time resident homebuyer is $6,500. Married individuals filing separately are limited to $3,250.
• You must file a paper return and attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit with additional documents to verify the purchase. Therefore, if you claim the credit you will not be able to file electronically.
• New homebuyers must attach a copy of a properly executed settlement statement used to complete such purchase. Buyers of a newly constructed home, where a settlement statement is not available, must attach a copy of the dated certificate of occupancy. Mobile home purchasers who are unable to get a settlement statement must attach a copy of the retail sales contract.
• If you are a long-time resident claiming the credit, the IRS recommends that you also attach any documentation covering the five-consecutive-year period, including Form 1098, Mortgage Interest Statement or substitute mortgage interest statements, property tax records or homeowner’s insurance records.
• Members of the military and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit.

For more information about these rules including details about documentation and other eligibility requirements for the First-Time Homebuyer Tax Credit, visit the IRS website.

Understanding these important tax facts is essential for first-time homebuyers.

source: irs.gov

Do you own a Dodge Durango, Cadillac Escalade, a plug-in electric car or an alternative-fuel vehicle and ? Do you plan to claim the electric vehicle tax credit on your 2010 federal income tax return?  If you answered yes to both questions, you better think twice.

A U.S. treasury inspector general has reported that over 10,000 taxpayers erroneously claimed almost $35 million in tax credits for plug-in and alternative-fuel vehicles in the first six months of 2010. That means almost twenty percent of the total $163 million electric vehicle tax credit were claimed in error.

The Inspector General report identified a few examples of the illegal tax credit claim.  Some tried to claim the $7,500 credit on their Dodge Durango, Hummer H3 and Cadillac Escalade SUV.

Before claiming your electric vehicle tax credit, chech with your tax attorney or accountant to see your vehicle qualifies.