Working parents, take note: You could get some summertime tax relief from the IRS.

If you've enrolled your kids in summer day camps while you're at work – or even looking for work, you may be eligible for a tax credit.

Under existing rules, up to 35 percent of qualifying day camp expenses can be claimed as a federal child care tax credit for children under 13.

"We want to let parents know that a summer day camp can qualify for a tax credit, just as a day care center or hiring a baby sitter can qualify during the school year," said IRS spokesman Jesse Weller.

It's part of the federal child and dependent care tax credit, which allows a maximum 35 percent credit. For incomes above $43,000, the percentage drops to 20 percent.

Qualifying expenses for the tax credit are limited to $3,000 per year for one child or $6,000 for two or more. So if you're eligible for the maximum 35 percent with one child, you could claim a credit of $1,050.

There's even an IRS YouTube video ("Summer Day Camp Expenses") in English and Spanish. More details also are in IRS Publication 503, "Child and Dependent Care Expenses," available online at www.irs.gov or by calling (800) 829-3676 (TAX-FORM).

But note: Overnight camps don't count toward the day care tax credit. The only qualifying expenses are for daytime camps used by parents who are working or looking for work. Similarly, the state Francise tax Borad lets parents apply their kids' daycamp expenses toward the California Child and Dependent Care Credit. It's a refundable credit, up to $525, on annual individual incomes up to $100,000.

Here's another kids-and-taxes topic: If your teen is working this summer, the IRS recently issued a friendly reminder that his or her income is taxable, at any amount. That includes tips earned as a waitress or income from so-called "self-employment," such as baby-sitting or lawn mowing.

A teen's employer must withhold taxes. And if a teen earns more than $400 a year from self-employment, he or she will have to pay Social Security taxes as well.

For more on teen hiring, see related story by Darrell Smith on Page D1.

And just a reminder, to hold a job in California, teen workers:

• Must be at least 14.

• Must have a signed work permit from their school or school district office, if they're under age 18.

• If under 14, are limited to jobs such as baby-sitting, lawn mowing, pet care, etc.

• Cannot do the following: drive a vehicle on public streets as part of the job; drive a forklift; use power equipment such as circular saws, box crushers, meat slicers or bakery machines; work in wrecking, demolition, excavation or roofing; handle, serve or sell alcoholic beverages; or work where there is exposure to radiation.

• Additionally, those under 14 or 15 cannot do baking or cooking on the job; work in dry cleaning or a commercial laundry; do building, construction or manufacturing work; load or unload a truck, railroad car or conveyor; or work on a ladder or scaffold.

California labor laws limit what hours teens can work during the summer, as well as during the school year.

For details, see the California Department of Industrial Relations website, www.dir.ca.gov. (Search under "Teens")

And for IRS summer tax questions in general, call (800) 829-1040 or go to: www.irs.gov.

20080730 SDJ>

Bogged down by debt?

Coming out of the recent recession, it's easy to be burdened by money worries: unpaid bills, student loans, hefty credit card balances, medical bills.

That's what inspired AARP.org recently to launch its "Pay Down Your Debt Challenge" an online contest to inspire readers to get on top of their money woes and share their clear-out-debt tips.

And it's also why we're hosting an online live chat at sacbee.com on Aug. 3 with "Ask Doctor Debt," the consumer site of the California Association of Collectors. The CAC is in the business of collecting consumer debts and can answer your questions on debt-collection rights-and-wrongs, how to avoid collection agency calls and other hot-button issues. More about that next week.

As for AARP's "Debt Challenge," it's part reward, part group therapy. Each Monday through Aug. 14, AARP money coach Lynnette Khalfani-Cox will post a money challenge, then solicit ideas, comments and solutions from readers for getting out of debt. Based on that week's posts from participants, there'll be a weekly prize – a self-help financial book.

And daily, Khalfani-Cox will dish out money-management tips on tackling student loan debt, paying down a mortgage, handling credit card bills, etc.

At the end of the monthlong "Pay Down Your Debt" challenge, AARP.org will select three overall winners, who will receive a $2,000, $1,000 or $500 cash card.

And whether you participate in the contest or not, the website has a "personal debt-tracking tool" that lets you set a financial goal – such as paying down a mortgage – and monitor your daily, weekly or or monthly progress.

Last week's first challenge was deceptively simple: Write down a complete list of all your debts, including that little loan from your sister and every penny owed on your credit cards.

The point "isn't to depress you," said AARP's Khalfani-Cox. "It's to give you a wake-up call and let you face your bills head on – just like I had to do," she noted.

Too many people, she said, simply "guesstimate" their debts and ignore the magnitude of their problem. Once you know the dimensions of your debt, she says, you're ready to start whittling it down.

For complete "Debt Challenge" contest rules and deadlines, go to: www.aarp.org. You do not have to be an AARP member to participate.

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Have a personal finance question? Contact The Bee's Claudia Buck at (916) 321-1968.

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