Day camp is a qualified expense under the child or dependent care credit, which is worth 20% of qualifying expenses (more if your adjusted gross income is less than $43,000), subject to a cap. For 2013, the maximum expenses allowed for the credit are $3,000 for one qualifying child and $6,000 for two or more. The credit’s value had been scheduled to drop in 2013, but the American Taxpayer Relief Act of 2012 made higher limits permanent.

Be aware, however, that overnight camp costs don’t qualify for the credit.

A wide variety of tax breaks are available to parents. If you’d like to learn more, please contact us.

On June 26, the U.S. Supreme Court struck down Section 3 of the 1996 Defense of Marriage Act (DOMA) as a violation of the U.S. Constitution’s guarantee of equal protection under the law. Sec. 3 defined marriage for federal benefits purposes as being between a man and a woman, thus denying federal benefits — including many tax benefits — to same-sex married couples.

The ruling means that, in states where same-sex marriage is recognized, same-sex married couples will be able to claim numerous federal tax benefits related to being married. But in some cases, these couples will also be subject to some tax burdens, such as the “marriage penalty.”

Same-sex married couples in states where their marriages are recognized should consult their tax planning advisors to determine what new opportunities may be available to them and whether there are any new burdens they should plan for. Please contact us if you have questions.

Please be advised of a new and upcoming fee to be reported and paid to the IRS.

The Affordable Care Act includes a provision that requires a fee to be paid by issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans. The purpose of this fee is to help fund the Patient-Centered Outcomes Research Institute (PCOR). This fee is temporary and is slated to end on September 30, 2019.

Who pays the fee:

• Businesses that sponsor self-insured health plans
• Businesses that provide a Health Reimbursement Account (HRA), and/or
• Businesses that provide certain Health Flexible Spending Arrangements (Health FSA)

When to pay the fee:

• If your plan year ends on or after October 1, 2012, the first payment is due July 31, 2013
• If your plan year ends on or after October 1, 2013, the first payment is due July 31, 2014

How much: the amount of the fee for plan years ending on or after October 1, 2012 and before October 1, 2013 is $1.00 multiplied by the average number of lives covered under the plan.  For plan years ending on or after October 1, 2013 the fee is raised to $2.00 multiplied by the average number of lives covered under the plan

How to pay: the fees are to be reported annually on Part II of the second quarter Form 720, which is due July 31 of each year

Where to find additional information: We are available to assist you with any questions you may have on this matter.

Please contact your Whalen business advisor to let us know how we can help!

A special congratulations goes out to partner Richard Crabtree, for winning the 2013 Enterprise Worldwide Brand Ambassador award at the Annual Symposium Five Star Awards Banquet. This award is presented to the individual that exemplifies all that is Enterprise Worldwide, an individual who gains tremendous benefit from their interaction with the network and gives even more back through consistently serving fellow members with Five Star Client Service. Enterprise Worldwide is an international network of independent accounting and consulting firms located throughout the world.