Can You Take a Tax Deduction for Youth Sports?

Youth sports are insanely expensive. Does this mean you get a tax deduction?

Youth sports expenses are generally not tax deductible.

The cost of signing your child up for a sports program is generally not tax deductible. This includes registration fees, sports equipment, travel costs, and other expenses.

Youth sports is considered a recreational activity and personal expense. There are no provisions in the tax code to deduct these expenses.

You may be able to take the Child and Dependent Care Tax Credit.

The Child and Dependent Care Tax Credit is a tax credit that offsets the costs of caring for a child under age 13. It is separate from the Child Tax Credit.

The Child and Dependent Care Credit applies if you need child care so you can go to work or look for work. If you’re married, your spouse must also be working or looking for work.

This tax credit isn’t directly related to sports, but it includes virtually all child care options outside of hiring family members or teenagers. You’re just choosing to use a sports program as a child care option.

Sports programs that provide care before or after school may be eligible for this tax credit. Summer day camps are also potentially eligible. Sleepover camps are generally not eligible since most people only work for part of the day and don’t need 24/7 child care.

You can claim a maximum of $3,000 expenses if you have one eligible child or $6,000 in expenses if you have two or more eligible children.

The tax credit is worth between 20% to 35% of the expenses depending on your income. If you make $15,000 per year, you get 35%. If you make $438,000 per year, you get 20%. If you make in between, the percentage is on a sliding scale.

The maximum credit is $1,050 for one child or $2,100 for two or more children.

To learn more about the Child and Dependent Care credit, see this IRS guide, but note that the credit had a special increase for tax year 2021 only, so some of the info may not apply to 2022.

Donations to a sports club or league may be deductible.

Donations to a sports club or league may be tax deductible as a charitable contribution. To qualify, the organization must be an eligible non-profit organization.

You can only deduct contributions that are above the benefits you receive. So if you participate in a fundraiser to help kids that can’t afford to play, that donation is deductible. Your child’s registration fees and other expenses aren’t deductible even if the organization is a non-profit.

Don’t forget to keep records showing what any amount you want to deduct is for. Otherwise, the IRS might think the money was for your child’s personal expenses.

It probably doesn’t matter if it’s for college.

If you’re using sports as a way to get a college scholarship, it generally won’t make the expenses deductible.

Once your child is in college, their expenses would usually only be deductible if they’re part of a degree program. Expenses for extracurriculars, even those that give scholarships, are typically not deductible.

If your child earns an NIL deal, they may be able to deduct expenses related to that deal.

There may be deductible expense if they’re getting paid.

If your child wins prize money or is at a level where they’re getting paid to play, some of their sports expenses may be deductible as a business expense. To qualify for deductions, they’d generally need to be making enough that they’re making a reasonable wage after expenses. Otherwise, they might be classified as a hobby and have to pay taxes on income but not be eligible to deduct expenses.

Minors with job as a paid sports official can deduct their officiating expenses from their earnings.

 

Disclaimer: This post is provided for general information only. The information may be outdated or may not fully cover the unique circumstances of your specific situation. Always consult with an appropriate professional before making important decisions.

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