§21 — Expenses for household and dependent care services necessary for gainful employment
138 citing cases
Statute Text — 26 U.S.C. §21
In the case of an individual for which there are 1 or more qualifying individuals (as defined in subsection (b)(1)) with respect to such individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable percentage of the employment-related expenses (as defined in subsection (b)(2)) paid by such individual during the taxable year.
For purposes of paragraph (1), the term “applicable percentage” means 50 percent—
reduced (but not below 35 percent) by 1 percentage point for each $2,000 or fraction thereof by which the taxpayer’s adjusted gross income for the taxable year exceeds $15,000, and
further reduced (but not below 20 percent) by 1 percentage point for each $2,000 ($4,000 in the case of a joint return) or fraction thereof by which the taxpayer’s adjusted gross income for the taxable year exceeds $75,000 ($150,000 in the case of a joint return).
For purposes of this section—
The term “qualifying individual” means—
a dependent of the taxpayer (as defined in section 152(a)(1)) who has not attained age 13,
a dependent of the taxpayer (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B)) who is physically or mentally incapable of caring for himself or herself and who has the same principal place of abode as the taxpayer for more than one-half of such taxable year, or
the spouse of the taxpayer, if the spouse is physically or mentally incapable of caring for himself or herself and who has the same principal place of abode as the taxpayer for more than one-half of such taxable year.
The term “employment-related expenses” means amounts paid for the following expenses, but only if such expenses are incurred to enable the taxpayer to be gainfully employed for any period for which there are 1 or more qualifying individuals with respect to the taxpayer:
expenses for household services, and
expenses for the care of a qualifying individual.
Such term shall not include any amount paid for services outside the taxpayer’s household at a camp where the qualifying individual stays overnight.
Employment-related expenses described in subparagraph (A) which are incurred for services outside the taxpayer’s household shall be taken into account only if incurred for the care of—
a qualifying individual described in paragraph (1)(A), or
a qualifying individual (not described in paragraph (1)(A)) who regularly spends at least 8 hours each day in the taxpayer’s household.
Employment-related expenses described in subparagraph (A) which are incurred for services provided outside the taxpayer’s household by a dependent care center (as defined in subparagraph (D)) shall be taken into account only if—
such center complies with all applicable laws and regulations of a State or unit of local government, and
the requirements of subparagraph (B) are met.
For purposes of this paragraph, the term “dependent care center” means any facility which—
provides care for more than six individuals (other than individuals who reside at the facility), and
receives a fee, payment, or grant for providing services for any of the individuals (regardless of whether such facility is operated for profit).
The amount of the employment-related expenses incurred during any taxable year which may be taken into account under subsection (a) shall not exceed—
$3,000 if there is 1 qualifying individual with respect to the taxpayer for such taxable year, or
$6,000 if there are 2 or more qualifying individuals with respect to the taxpayer for such taxable year.
The amount determined under paragraph (1) or (2) (whichever is applicable) shall be reduced by the aggregate amount excludable from gross income under section 129 for the taxable year.
Except as otherwise provided in this subsection, the amount of the employment-related expenses incurred during any taxable year which may be taken into account under subsection (a) shall not exceed—
in the case of an individual who is not married at the close of such year, such individual’s earned income for such year, or
in the case of an individual who is married at the close of such year, the lesser of such individual’s earned income or the earned income of his spouse for such year.
In the case of a spouse who is a student or a qualifying individual described in subsection (b)(1)(C), for purposes of paragraph (1), such spouse shall be deemed for each month during which such spouse is a full-time student at an educational institution, or is such a qualifying individual, to be gainfully employed and to have earned income of not less than—
$250 if subsection (c)(1) applies for the taxable year, or
$500 if subsection (c)(2) applies for the taxable year.
In the case of any husband and wife, this paragraph shall apply with respect to only one spouse for any one month.
For purposes of this section—
An individual shall not be treated as having the same principal place of abode of the taxpayer if at any time during the taxable year of the taxpayer the relationship between the individual and the taxpayer is in violation of local law.
If the taxpayer is married at the close of the taxable year, the credit shall be allowed under subsection (a) only if the taxpayer and his spouse file a joint return for the taxable year.
An individual legally separated from his spouse under a decree of divorce or of separate maintenance shall not be considered as married.
If—
an individual who is married and who files a separate return—
maintains as his home a household which constitutes for more than one-half of the taxable year the principal place of abode of a qualifying individual, and
furnishes over half of the cost of maintaining such household during the taxable year, and
during the last 6 months of such taxable year such individual’s spouse is not a member of such household,
such individual shall not be considered as married.
If—
section 152(e) applies to any child with respect to any calendar year, and
such child is under the age of 13 or is physically or mentally incapable of caring for himself,
in the case of any taxable year beginning in such calendar year, such child shall be treated as a qualifying individual described in subparagraph (A) or (B) of subsection (b)(1) (whichever is appropriate) with respect to the custodial parent (as defined in section 152(e)(4)(A)), and shall not be treated as a qualifying individual with respect to the noncustodial parent.
No credit shall be allowed under subsection (a) for any amount paid by the taxpayer to an individual—
with respect to whom, for the taxable year, a deduction under section 151(c) (relating to deduction for personal exemptions for dependents) is allowable either to the taxpayer or his spouse, or
who is a child of the taxpayer (within the meaning of section 152(f)(1)) who has not attained the age of 19 at the close of the taxable year.
For purposes of this paragraph, the term “taxable year” means the taxable year of the taxpayer in which the service is performed.
The term “student” means an individual who during each of 5 calendar months during the taxable year is a full-time student at an educational organization.
The term “educational organization” means an educational organization described in section 170(b)(1)(A)(ii).
No credit shall be allowed under subsection (a) for any amount paid to any person unless—
the name, address, and taxpayer identification number of such person are included on the return claiming the credit, or
if such person is an organization described in section 501(c)(3) and exempt from tax under section 501(a), the name and address of such person are included on the return claiming the credit.
In the case of a failure to provide the information required under the preceding sentence, the preceding sentence shall not apply if it is shown that the taxpayer exercised due diligence in attempting to provide the information so required.
No credit shall be allowed under this section with respect to any qualifying individual unless the TIN of such individual is included on the return claiming the credit.
The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section.
In the case of any taxable year beginning after
December 31, 2020
, and before
January 1, 2022
—
If the taxpayer (in the case of a joint return, either spouse) has a principal place of abode in the United States (determined as provided in section 32) for more than one-half of the taxable year, the credit allowed under subsection (a) shall be treated as a credit allowed under subpart C (and not allowed under this subpart).
Subsection (c) shall be applied—
by substituting “$8,000” for “$3,000” in paragraph (1) thereof, and
by substituting “$16,000” for “$6,000” in paragraph (2) thereof.
Subsection (a)(2) shall be applied—
by substituting “50 percent” for “35 percent”, and
by substituting “$125,000” for “$15,000”.
Subsection (a)(2) shall be applied by substituting “the phaseout percentage” for “20 percent”.
The term “phaseout percentage” means 20 percent reduced (but not below zero) by 1 percentage point for each $2,000 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year exceeds $400,000.
The Secretary shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the application of this section (determined without regard to this subsection) with respect to taxable years beginning in or with 2021. Such amounts shall be determined by the Secretary based on information provided by the government of the respective possession.
The Secretary shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of this section with respect to taxable years beginning in or with 2021 if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary, under which such possession will promptly distribute such payments to its residents.
In the case of any taxable year beginning in or with 2021, no credit shall be allowed under this section to any individual—
to whom a credit is allowable against taxes imposed by a possession with a mirror code tax system by reason of this section, or
who is eligible for a payment under a plan described in paragraph (2).
For purposes of this subsection, the term “mirror code tax system” means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.
For purposes of section 1324 of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.
Treasury Regulations
-
Treas. Reg. §1.21-1Expenses for household and dependent care services necessary for gainful employment
(a) In general. (1) Section 21 allows a credit to a taxpayer against the tax imposed by chapter 1 for employment-related expenses for household services and care (as defined in paragraph (d) of this section) of a qualifying individual (as defined in paragraph (b) of this section). The purpose of the expenses must be to enable the taxpayer to be gainfully employed (as defined in paragraph (c) of this section). For taxable years beginning after December 31, 2004, a qualifying individual must have the same principal place of abode (as defined in paragraph (g) of this section) as the taxpayer for more than one-half of the taxable year. For taxable years beginning before January 1, 2005, the taxpayer must maintain a household (as defined in paragraph (h) of this section) that includes one or more qualifying individuals.
(2) The amount of the credit is equal to the applicable percentage of the employment-related expenses that may be taken into account by the taxpayer during the taxable year (but subject to the limits prescribed in § 1.21-2). Applicable percentage means 35 percent reduced by 1 percentage point for each $2,000 (or fraction thereof) by which the taxpayer's adjusted gross income for the taxable year exceeds $15,000, but not less than 20 percent. For example, if a taxpayer's adjusted gross income is $31,850, the applicable percentage is 26 percent.
(3) Expenses may be taken as a credit under section 21, regardless of the taxpayer's method of accounting, only in the taxable year the services are performed or the taxable year the expenses are paid, whichever is later.
(4) The requirements of section 21 and §§ 1.21-1 through 1.21-4 are applied at the time the services are performed, regardless of when the expenses are paid.
(5) Examples. The provisions of this paragraph (a) are illustrated by the following examples.
(b) Qualifying individual—(1) In general. For taxable years beginning after December 31, 2004, a qualifying individual is—
(i) The taxpayer's dependent (who is a qualifying child within the meaning of section 152) who has not attained age 13;
(ii) The taxpayer's dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B)) who is physically or mentally incapable of self-care and who has the same principal place of abode as the taxpayer for more than one-half of the taxable year; or
(iii) The taxpayer's spouse who is physically or mentally incapable of self-care and who has the same principal place of abode as the taxpayer for more than one-half of the taxable year.
(2) Taxable years beginning before January 1, 2005. For taxable years beginning before January 1, 2005, a qualifying individual is—
(i) The taxpayer's dependent for whom the taxpayer is entitled to a deduction for a personal exemption under section 151(c) and who is under age 13;
(ii) The taxpayer's dependent who is physically or mentally incapable of self-care; or
(iii) The taxpayer's spouse who is physically or mentally incapable of self-care.
(3) Qualification on a daily basis. The status of an individual as a qualifying individual is determined on a daily basis. An individual is not a qualifying individual on the day the status terminates.
(4) Physical or mental incapacity. An individual is physically or mentally incapable of self-care if, as a result of a physical or mental defect, the individual is incapable of caring for the individual's hygiene or nutritional needs, or requires full-time attention of another person for the individual's own safety or the safety of others. The inability of an individual to engage in any substantial gainful activity or to perform the normal household functions of a homemaker or care for minor children by reason of a physical or mental condition does not of itself establish that the individual is physically or mentally incapable of self-care.
(5) Special test for divorced or separated parents or parents living apart—(i) Scope. This paragraph (b)(5) applies to a child (as defined in section 152(f)(1) for taxable years beginning after December 31, 2004, and in section 151(c)(3) for taxable years beginning before January 1, 2005) who—
(A) Is under age 13 or is physically or mentally incapable of self-care;
(B) Receives over one-half of his or her support during the calendar year from one or both parents who are divorced or legally separated under a decree of divorce or separate maintenance, are separated under a written separation agreement, or live apart at all times during the last 6 months of the calendar year; and
(C) Is in the custody of one or both parents for more than one-half of the calendar year.
(ii) Custodial parent allowed the credit. A child to whom this paragraph (b)(5) applies is the qualifying individual of only one parent in any taxable year and is the qualifying child of the custodial parent even if the noncustodial parent may claim the dependency exemption for that child for that taxable year. See section 21(e)(5). The custodial parent is the parent having custody for the greater portion of the calendar year. See section 152(e)(4)(A).
(6) Example. The provisions of this paragraph (b) are illustrated by the following examples.
(c) Gainful employment—(1) In general. Expenses are employment-related expenses only if they are for the purpose of enabling the taxpayer to be gainfully employed. The expenses must be for the care of a qualifying individual or household services performed during periods in which the taxpayer is gainfully employed or is in active search of gainful employment. Employment may consist of service within or outside the taxpayer's home and includes self-employment. An expense is not employment-related merely because it is paid or incurred while the taxpayer is gainfully employed. The purpose of the expense must be to enable the taxpayer to be gainfully employed. Whether the purpose of an expense is to enable the taxpayer to be gainfully employed depends on the facts and circumstances of the particular case. Work as a volunteer or for a nominal consideration is not gainful employment.
(2) Determination of period of employment on a daily basis—(i) In general. Expenses paid for a period during only part of which the taxpayer is gainfully employed or in active search of gainful employment must be allocated on a daily basis.
(ii) Exception for short, temporary absences. A taxpayer who is gainfully employed is not required to allocate expenses during a short, temporary absence from work, such as for vacation or minor illness, provided that the care-giving arrangement requires the taxpayer to pay for care during the absence. An absence of 2 consecutive calendar weeks is a short, temporary absence. Whether an absence longer than 2 consecutive calendar weeks is a short, temporary absence is determined based on all the facts and circumstances.
(iii) Part-time employment. A taxpayer who is employed part-time generally must allocate expenses for dependent care between days worked and days not worked. However, if a taxpayer employed part-time is required to pay for dependent care on a periodic basis (such as weekly or monthly) that includes both days worked and days not worked, the taxpayer is not required to allocate the expenses. A day on which the taxpayer works at least 1 hour is a day of work.
(3) Examples. The provisions of this paragraph (c) are illustrated by the following examples:
(d) Care of qualifying individual and household services—(1) In general. To qualify for the dependent care credit, expenses must be for the care of a qualifying individual. Expenses are for the care of a qualifying individual if the primary function is to assure the individual's well-being and protection. Not all expenses relating to a qualifying individual are for the individual's care. Amounts paid for food, lodging, clothing, or education are not for the care of a qualifying individual. If, however, the care is provided in such a manner that the expenses cover other goods or services that are incidental to and inseparably a part of the care, the full amount is for care.
(2) Allocation of expenses. If an expense is partly for household services or for the care of a qualifying individual and partly for other goods or services, a reasonable allocation must be made. Only so much of the expense that is allocable to the household services or care of a qualifying individual is an employment-related expense. An allocation must be made if a housekeeper or other domestic employee performs household duties and cares for the qualifying children of the taxpayer and also performs other services for the taxpayer. No allocation is required, however, if the expense for the other purpose is minimal or insignificant or if an expense is partly attributable to the care of a qualifying individual and partly to household services.
(3) Household services. Expenses for household services may be employment-related expenses if the services are performed in connection with the care of a qualifying individual. The household services must be the performance in and about the taxpayer's home of ordinary and usual services necessary to the maintenance of the household and attributable to the care of the qualifying individual. Services of a housekeeper are household services within the meaning of this paragraph (d)(3) if the services are provided, at least in part, to the qualifying individual. Such services as are performed by chauffeurs, bartenders, or gardeners are not household services.
(4) Manner of providing care. The manner of providing care need not be the least expensive alternative available to the taxpayer. The cost of a paid caregiver may be an expense for the care of a qualifying individual even if another caregiver is available at no cost.
(5) School or similar program. Expenses for a child in nursery school, pre-school, or similar programs for children below the level of kindergarten are for the care of a qualifying individual and may be employment-related expenses. Expenses for a child in kindergarten or a higher grade are not for the care of a qualifying individual. However, expenses for before- or after-school care of a child in kindergarten or a higher grade may be for the care of a qualifying individual.
(6) Overnight camps. Expenses for overnight camps are not employment-related expenses.
(7) Day camps. (i) The cost of a day camp or similar program may be for the care of a qualifying individual and an employment-related expense, without allocation under paragraph (d)(2) of this section, even if the day camp specializes in a particular activity. Summer school and tutoring programs are not for the care of a qualifying individual and the costs are not employment-related expenses.
(ii) A day camp that meets the definition of dependent care center in section 21(b)(2)(D) and paragraph (e)(2) of this section must comply with the requirements of section 21(b)(2)(C) and paragraph (e)(2) of this section.
(8) Transportation. The cost of transportation by a dependent care provider of a qualifying individual to or from a place where care of that qualifying individual is provided may be for the care of the qualifying individual. The cost of transportation not provided by a dependent care provider is not for the care of the qualifying individual.
(9) Employment taxes. Taxes under sections 3111 (relating to the Federal Insurance Contributions Act) and 3301 (relating to the Federal Unemployment Tax Act) and similar state payroll taxes are employment-related expenses if paid in respect of wages that are employment-related expenses.
(10) Room and board. The additional cost of providing room and board for a caregiver over usual household expenditures may be an employment-related expense.
(11) Indirect expenses. Expenses that relate to, but are not directly for, the care of a qualifying individual, such as application fees, agency fees, and deposits, may be for the care of a qualifying individual and may be employment-related expenses if the taxpayer is required to pay the expenses to obtain the related care. However, forfeited deposits and other payments are not for the care of a qualifying individual if care is not provided.
(12) Examples. The provisions of this paragraph (d) are illustrated by the following examples:
(e) Services outside the taxpayer's household—(1) In general. The credit is allowable for expenses for services performed outside the taxpayer's household only if the care is for one or more qualifying individuals who are described in this section at—
(i) Paragraph (b)(1)(i) or (b)(2)(i); or
(ii) Paragraph (b)(1)(ii), (b)(2)(ii), (b)(1)(iii), or (b)(2)(iii) and regularly spend at least 8 hours each day in the taxpayer's household.
(2) Dependent care centers—(i) In general. The credit is allowable for services performed by a dependent care center only if—
(A) The center complies with all applicable laws and regulations, if any, of a state or local government, such as state or local licensing requirements and building and fire code regulations; and
(B) The requirements provided in this paragraph (e) are met.
(ii) Definition. The term dependent care center means any facility that provides full-time or part-time care for more than six individuals (other than individuals who reside at the facility) on a regular basis during the taxpayer's taxable year, and receives a fee, payment, or grant for providing services for the individuals (regardless of whether the facility is operated for profit). For purposes of the preceding sentence, a facility is presumed to provide full-time or part-time care for six or fewer individuals on a regular basis during the taxpayer's taxable year if the facility has six or fewer individuals (including the taxpayer's qualifying individual) enrolled for full-time or part-time care on the day the qualifying individual is enrolled in the facility (or on the first day of the taxable year the qualifying individual attends the facility if the qualifying individual was enrolled in the facility in the preceding taxable year) unless the Internal Revenue Service demonstrates that the facility provides full-time or part-time care for more than six individuals on a regular basis during the taxpayer's taxable year.
(f) Reimbursed expenses. Employment-related expenses for which the taxpayer is reimbursed (for example, under a dependent care assistance program) may not be taken into account for purposes of the credit.
(g) Principal place of abode. For purposes of this section, the term principal place of abode has the same meaning as in section 152.
(h) Maintenance of a household—(1) In general. For taxable years beginning before January 1, 2005, the credit is available only to a taxpayer who maintains a household that includes one or more qualifying individuals. A taxpayer maintains a household for the taxable year (or lesser period) only if the taxpayer (and spouse, if applicable) occupies the household and furnishes over one-half of the cost for the taxable year (or lesser period) of maintaining the household. The household must be the principal place of abode for the taxable year of the taxpayer and the qualifying individual or individuals.
(2) Cost of maintaining a household. (i) Except as provided in paragraph (h)(2)(ii) of this section, for purposes of this section, the term cost of maintaining a household has the same meaning as in § 1.2-2(d) without regard to the last sentence thereof.
(ii) The cost of maintaining a household does not include the value of services performed in the household by the taxpayer or by a qualifying individual described in paragraph (b) of this section or any expense paid or reimbursed by another person.
(3) Monthly proration of annual costs. In determining the cost of maintaining a household for a period of less than a taxable year, the cost for the entire taxable year must be prorated on the basis of the number of calendar months within that period. A period of less than a calendar month is treated as a full calendar month.
(4) Two or more families. If two or more families occupy living quarters in common, each of the families is treated as maintaining a separate household. A taxpayer is maintaining a household if the taxpayer provides more than one-half of the cost of maintaining the separate household. For example, if two unrelated taxpayers with their respective children occupy living quarters in common and each taxpayer pays more than one-half of the household costs for each respective family, each taxpayer is treated as maintaining a household.
(i) Reserved.
(j) Expenses qualifying as medical expenses—(1) In general. A taxpayer may not take an amount into account as both an employment-related expense under section 21 and an expense for medical care under section 213.
(2) Examples. The provisions of this paragraph (j) are illustrated by the following examples:
(k) Substantiation. A taxpayer claiming a credit for employment-related expenses must maintain adequate records or other sufficient evidence to substantiate the expenses in accordance with section 6001 and the regulations thereunder.
(l) Effective/applicability date. This section and §§ 1.21-2 through 1.21-4 apply to taxable years ending after August 14, 2007.
-
Treas. Reg. §1.21-1(a)In general.
In general. (1) Section 21 allows a credit to a taxpayer against the tax imposed by chapter 1 for employment-related expenses for household services and care (as defined in paragraph (d) of this section) of a qualifying individual (as defined in paragraph (b) of this section). The purpose of the expenses must be to enable the taxpayer to be gainfully employed (as defined in paragraph (c) of this section). For taxable years beginning after December 31, 2004, a qualifying individual must have the same principal place of abode (as defined in paragraph (g) of this section) as the taxpayer for more than one-half of the taxable year. For taxable years beginning before January 1, 2005, the taxpayer must maintain a household (as defined in paragraph (h) of this section) that includes one or more qualifying individuals.
(2) The amount of the credit is equal to the applicable percentage of the employment-related expenses that may be taken into account by the taxpayer during the taxable year (but subject to the limits prescribed in § 1.21-2). Applicable percentage means 35 percent reduced by 1 percentage point for each $2,000 (or fraction thereof) by which the taxpayer's adjusted gross income for the taxable year exceeds $15,000, but not less than 20 percent. For example, if a taxpayer's adjusted gross income is $31,850, the applicable percentage is 26 percent.
(3) Expenses may be taken as a credit under section 21, regardless of the taxpayer's method of accounting, only in the taxable year the services are performed or the taxable year the expenses are paid, whichever is later.
(4) The requirements of section 21 and §§ 1.21-1 through 1.21-4 are applied at the time the services are performed, regardless of when the expenses are paid.
(5) Examples. The provisions of this paragraph (a) are illustrated by the following examples.
-
Treas. Reg. §1.21-1(b)Qualifying individual—(1) In general.
Qualifying individual—(1) In general. For taxable years beginning after December 31, 2004, a qualifying individual is—
-
Treas. Reg. §1.21-1(c)Gainful employment—(1) In general.
Gainful employment—(1) In general. Expenses are employment-related expenses only if they are for the purpose of enabling the taxpayer to be gainfully employed. The expenses must be for the care of a qualifying individual or household services performed during periods in which the taxpayer is gainfully employed or is in active search of gainful employment. Employment may consist of service within or outside the taxpayer's home and includes self-employment. An expense is not employment-related merely because it is paid or incurred while the taxpayer is gainfully employed. The purpose of the expense must be to enable the taxpayer to be gainfully employed. Whether the purpose of an expense is to enable the taxpayer to be gainfully employed depends on the facts and circumstances of the particular case. Work as a volunteer or for a nominal consideration is not gainful employment.
(2) Determination of period of employment on a daily basis—(i) In general. Expenses paid for a period during only part of which the taxpayer is gainfully employed or in active search of gainful employment must be allocated on a daily basis.
(ii) Exception for short, temporary absences. A taxpayer who is gainfully employed is not required to allocate expenses during a short, temporary absence from work, such as for vacation or minor illness, provided that the care-giving arrangement requires the taxpayer to pay for care during the absence. An absence of 2 consecutive calendar weeks is a short, temporary absence. Whether an absence longer than 2 consecutive calendar weeks is a short, temporary absence is determined based on all the facts and circumstances.
(iii) Part-time employment. A taxpayer who is employed part-time generally must allocate expenses for dependent care between days worked and days not worked. However, if a taxpayer employed part-time is required to pay for dependent care on a periodic basis (such as weekly or monthly) that includes both days worked and days not worked, the taxpayer is not required to allocate the expenses. A day on which the taxpayer works at least 1 hour is a day of work.
(3) Examples. The provisions of this paragraph (c) are illustrated by the following examples:
-
Treas. Reg. §1.21-1(d)Care of qualifying individual and household services—(1) In general.
Care of qualifying individual and household services—(1) In general. To qualify for the dependent care credit, expenses must be for the care of a qualifying individual. Expenses are for the care of a qualifying individual if the primary function is to assure the individual's well-being and protection. Not all expenses relating to a qualifying individual are for the individual's care. Amounts paid for food, lodging, clothing, or education are not for the care of a qualifying individual. If, however, the care is provided in such a manner that the expenses cover other goods or services that are incidental to and inseparably a part of the care, the full amount is for care.
(2) Allocation of expenses. If an expense is partly for household services or for the care of a qualifying individual and partly for other goods or services, a reasonable allocation must be made. Only so much of the expense that is allocable to the household services or care of a qualifying individual is an employment-related expense. An allocation must be made if a housekeeper or other domestic employee performs household duties and cares for the qualifying children of the taxpayer and also performs other services for the taxpayer. No allocation is required, however, if the expense for the other purpose is minimal or insignificant or if an expense is partly attributable to the care of a qualifying individual and partly to household services.
(3) Household services. Expenses for household services may be employment-related expenses if the services are performed in connection with the care of a qualifying individual. The household services must be the performance in and about the taxpayer's home of ordinary and usual services necessary to the maintenance of the household and attributable to the care of the qualifying individual. Services of a housekeeper are household services within the meaning of this paragraph (d)(3) if the services are provided, at least in part, to the qualifying individual. Such services as are performed by chauffeurs, bartenders, or gardeners are not household services.
(4) Manner of providing care. The manner of providing care need not be the least expensive alternative available to the taxpayer. The cost of a paid caregiver may be an expense for the care of a qualifying individual even if another caregiver is available at no cost.
(5) School or similar program. Expenses for a child in nursery school, pre-school, or similar programs for children below the level of kindergarten are for the care of a qualifying individual and may be employment-related expenses. Expenses for a child in kindergarten or a higher grade are not for the care of a qualifying individual. However, expenses for before- or after-school care of a child in kindergarten or a higher grade may be for the care of a qualifying individual.
(6) Overnight camps. Expenses for overnight camps are not employment-related expenses.
(7) Day camps. (i) The cost of a day camp or similar program may be for the care of a qualifying individual and an employment-related expense, without allocation under paragraph (d)(2) of this section, even if the day camp specializes in a particular activity. Summer school and tutoring programs are not for the care of a qualifying individual and the costs are not employment-related expenses.
(ii) A day camp that meets the definition of dependent care center in section 21(b)(2)(D) and paragraph (e)(2) of this section must comply with the requirements of section 21(b)(2)(C) and paragraph (e)(2) of this section.
(8) Transportation. The cost of transportation by a dependent care provider of a qualifying individual to or from a place where care of that qualifying individual is provided may be for the care of the qualifying individual. The cost of transportation not provided by a dependent care provider is not for the care of the qualifying individual.
(9) Employment taxes. Taxes under sections 3111 (relating to the Federal Insurance Contributions Act) and 3301 (relating to the Federal Unemployment Tax Act) and similar state payroll taxes are employment-related expenses if paid in respect of wages that are employment-related expenses.
(10) Room and board. The additional cost of providing room and board for a caregiver over usual household expenditures may be an employment-related expense.
(11) Indirect expenses. Expenses that relate to, but are not directly for, the care of a qualifying individual, such as application fees, agency fees, and deposits, may be for the care of a qualifying individual and may be employment-related expenses if the taxpayer is required to pay the expenses to obtain the related care. However, forfeited deposits and other payments are not for the care of a qualifying individual if care is not provided.
(12) Examples. The provisions of this paragraph (d) are illustrated by the following examples:
-
Treas. Reg. §1.21-1(e)Services outside the taxpayer's household—(1) In general.
Services outside the taxpayer's household—(1) In general. The credit is allowable for expenses for services performed outside the taxpayer's household only if the care is for one or more qualifying individuals who are described in this section at—
-
Treas. Reg. §1.21-1(f)Reimbursed expenses.
Reimbursed expenses. Employment-related expenses for which the taxpayer is reimbursed (for example, under a dependent care assistance program) may not be taken into account for purposes of the credit.
-
Treas. Reg. §1.21-1(g)Principal place of abode.
Principal place of abode. For purposes of this section, the term principal place of abode has the same meaning as in section 152.
-
Treas. Reg. §1.21-1(h)Maintenance of a household—(1) In general.
Maintenance of a household—(1) In general. For taxable years beginning before January 1, 2005, the credit is available only to a taxpayer who maintains a household that includes one or more qualifying individuals. A taxpayer maintains a household for the taxable year (or lesser period) only if the taxpayer (and spouse, if applicable) occupies the household and furnishes over one-half of the cost for the taxable year (or lesser period) of maintaining the household. The household must be the principal place of abode for the taxable year of the taxpayer and the qualifying individual or individuals.
(2) Cost of maintaining a household. (i) Except as provided in paragraph (h)(2)(ii) of this section, for purposes of this section, the term cost of maintaining a household has the same meaning as in § 1.2-2(d) without regard to the last sentence thereof.
(ii) The cost of maintaining a household does not include the value of services performed in the household by the taxpayer or by a qualifying individual described in paragraph (b) of this section or any expense paid or reimbursed by another person.
(3) Monthly proration of annual costs. In determining the cost of maintaining a household for a period of less than a taxable year, the cost for the entire taxable year must be prorated on the basis of the number of calendar months within that period. A period of less than a calendar month is treated as a full calendar month.
(4) Two or more families. If two or more families occupy living quarters in common, each of the families is treated as maintaining a separate household. A taxpayer is maintaining a household if the taxpayer provides more than one-half of the cost of maintaining the separate household. For example, if two unrelated taxpayers with their respective children occupy living quarters in common and each taxpayer pays more than one-half of the household costs for each respective family, each taxpayer is treated as maintaining a household.
-
Treas. Reg. §1.21-1(i)Reserved.
Reserved.
-
Treas. Reg. §1.21-1(j)Expenses qualifying as medical expenses—(1) In general.
Expenses qualifying as medical expenses—(1) In general. A taxpayer may not take an amount into account as both an employment-related expense under section 21 and an expense for medical care under section 213.
(2) Examples. The provisions of this paragraph (j) are illustrated by the following examples:
-
Treas. Reg. §1.21-1(k)Substantiation.
Substantiation. A taxpayer claiming a credit for employment-related expenses must maintain adequate records or other sufficient evidence to substantiate the expenses in accordance with section 6001 and the regulations thereunder.
-
Treas. Reg. §1.21-1(l)Effective/applicability date.
Effective/applicability date. This section and §§ 1.21-2 through 1.21-4 apply to taxable years ending after August 14, 2007.
-
Treas. Reg. §1.21-2Limitations on amount creditable
(a) Annual dollar limitation. (1) The amount of employment-related expenses that may be taken into account under § 1.21-1(a) for any taxable year cannot exceed—
(i) $2,400 ($3,000 for taxable years beginning after December 31, 2002, and before January 1, 2011) if there is one qualifying individual with respect to the taxpayer at any time during the taxable year; or
(ii) $4,800 ($6,000 for taxable years beginning after December 31, 2002, and before January 1, 2011) if there are two or more qualifying individuals with respect to the taxpayer at any time during the taxable year.
(2) The amount determined under paragraph (a)(1) of this section is reduced by the aggregate amount excludable from gross income under section 129 for the taxable year.
(3) A taxpayer may take into account the total amount of employment-related expenses that do not exceed the annual dollar limitation although the amount of employment-related expenses attributable to one qualifying individual is disproportionate to the total employment-related expenses. For example, a taxpayer with expenses in 2007 of $4,000 for one qualifying individual and $1,500 for a second qualifying individual may take into account the full $5,500.
(4) A taxpayer is not required to prorate the annual dollar limitation if a qualifying individual ceases to qualify (for example, by turning age 13) during the taxable year. However, the taxpayer may take into account only amounts that qualify as employment-related expenses before the disqualifying event. See also § 1.21-1(b)(6).
(b) Earned income limitation—(1) In general. The amount of employment-related expenses that may be taken into account under section 21 for any taxable year cannot exceed—
(i) For a taxpayer who is not married at the close of the taxable year, the taxpayer's earned income for the taxable year; or
(ii) For a taxpayer who is married at the close of the taxable year, the lesser of the taxpayer's earned income or the earned income of the taxpayer's spouse for the taxable year.
(2) Determination of spouse. For purposes of this paragraph (b), a taxpayer must take into account only the earned income of a spouse to whom the taxpayer is married at the close of the taxable year. The spouse's earned income for the entire taxable year is taken into account, however, even though the taxpayer and the spouse were married for only part of the taxable year. The taxpayer is not required to take into account the earned income of a spouse who died or was divorced or separated from the taxpayer during the taxable year. See § 1.21-3(b) for rules providing that certain married taxpayers legally separated or living apart are treated as not married.
(3) Definition of earned income. For purposes of this section, the term earned income has the same meaning as in section 32(c)(2) and the regulations thereunder.
(4) Attribution of earned income to student or incapacitated spouse. (i) For purposes of this section, a spouse is deemed, for each month during which the spouse is a full-time student or is a qualifying individual described in § 1.21-1(b)(1)(iii) or (b)(2)(iii), to be gainfully employed and to have earned income of not less than—
(A) $200 ($250 for taxable years beginning after December 31, 2002, and before January 1, 2011) if there is one qualifying individual with respect to the taxpayer at any time during the taxable year; or
(B) $400 ($500 for taxable years beginning after December 31, 2002, and before January 1, 2011) if there are two or more qualifying individuals with respect to the taxpayer at any time during the taxable year.
(ii) For purposes of this paragraph (b)(4), a full-time student is an individual who, during each of 5 calendar months of the taxpayer's taxable year, is enrolled as a student for the number of course hours considered to be a full-time course of study at an educational organization as defined in section 170(b)(1)(A)(ii). The enrollment for 5 calendar months need not be consecutive.
(iii) Earned income may be attributed under this paragraph (b)(4), in the case of any husband and wife, to only one spouse in any month.
(c) Examples. The provisions of this section are illustrated by the following examples:
(d) Cross-reference. For an additional limitation on the credit under section 21, see section 26.
-
Treas. Reg. §1.21-2(a)Annual dollar limitation.
Annual dollar limitation. (1) The amount of employment-related expenses that may be taken into account under § 1.21-1(a) for any taxable year cannot exceed—
-
Treas. Reg. §1.21-2(b)Earned income limitation—(1) In general.
Earned income limitation—(1) In general. The amount of employment-related expenses that may be taken into account under section 21 for any taxable year cannot exceed—
-
Treas. Reg. §1.21-2(c)Examples.
Examples. The provisions of this section are illustrated by the following examples:
-
Treas. Reg. §1.21-2(d)Cross-reference.
Cross-reference. For an additional limitation on the credit under section 21, see section 26.
-
Treas. Reg. §1.21-2(i)§1.21-2(i)
For a taxpayer who is not married at the close of the taxable year, the taxpayer's earned income for the taxable year; or
(ii) For a taxpayer who is married at the close of the taxable year, the lesser of the taxpayer's earned income or the earned income of the taxpayer's spouse for the taxable year.
(2) Determination of spouse. For purposes of this paragraph (b), a taxpayer must take into account only the earned income of a spouse to whom the taxpayer is married at the close of the taxable year. The spouse's earned income for the entire taxable year is taken into account, however, even though the taxpayer and the spouse were married for only part of the taxable year. The taxpayer is not required to take into account the earned income of a spouse who died or was divorced or separated from the taxpayer during the taxable year. See § 1.21-3(b) for rules providing that certain married taxpayers legally separated or living apart are treated as not married.
(3) Definition of earned income. For purposes of this section, the term earned income has the same meaning as in section 32(c)(2) and the regulations thereunder.
(4) Attribution of earned income to student or incapacitated spouse. (i) For purposes of this section, a spouse is deemed, for each month during which the spouse is a full-time student or is a qualifying individual described in § 1.21-1(b)(1)(iii) or (b)(2)(iii), to be gainfully employed and to have earned income of not less than—
(A) $200 ($250 for taxable years beginning after December 31, 2002, and before January 1, 2011) if there is one qualifying individual with respect to the taxpayer at any time during the taxable year; or
(B) $400 ($500 for taxable years beginning after December 31, 2002, and before January 1, 2011) if there are two or more qualifying individuals with respect to the taxpayer at any time during the taxable year.
(ii) For purposes of this paragraph (b)(4), a full-time student is an individual who, during each of 5 calendar months of the taxpayer's taxable year, is enrolled as a student for the number of course hours considered to be a full-time course of study at an educational organization as defined in section 170(b)(1)(A)(ii). The enrollment for 5 calendar months need not be consecutive.
(iii) Earned income may be attributed under this paragraph (b)(4), in the case of any husband and wife, to only one spouse in any month.
-
Treas. Reg. §1.21-3Special rules applicable to married taxpayers
(a) Joint return requirement. No credit is allowed under section 21 for taxpayers who are married (within the meaning of section 7703 and the regulations thereunder) at the close of the taxable year unless the taxpayer and spouse file a joint return for the taxable year. See section 6013 and the regulations thereunder relating to joint returns of income tax by husband and wife.
(b) Taxpayers treated as not married. The requirements of paragraph (a) of this section do not apply to a taxpayer who is legally separated under a decree of divorce or separate maintenance or who is treated as not married under section 7703(b) and the regulations thereunder (relating to certain married taxpayers living apart). A taxpayer who is treated as not married under this paragraph (b) is not required to take into account the earned income of the taxpayer's spouse for purposes of applying the earned income limitation on the amount of employment-related expenses under § 1.21-2(b).
(c) Death of married taxpayer. If a married taxpayer dies during the taxable year and the survivor may make a joint return with respect to the deceased spouse under section 6013(a)(3), the credit is allowed for the year only if a joint return is made. If, however, the surviving spouse remarries before the end of the taxable year in which the deceased spouse dies, a credit may be allowed on the decedent spouse's separate return.
-
Treas. Reg. §1.21-3(a)Joint return requirement.
Joint return requirement. No credit is allowed under section 21 for taxpayers who are married (within the meaning of section 7703 and the regulations thereunder) at the close of the taxable year unless the taxpayer and spouse file a joint return for the taxable year. See section 6013 and the regulations thereunder relating to joint returns of income tax by husband and wife.
-
Treas. Reg. §1.21-3(b)Taxpayers treated as not married.
Taxpayers treated as not married. The requirements of paragraph (a) of this section do not apply to a taxpayer who is legally separated under a decree of divorce or separate maintenance or who is treated as not married under section 7703(b) and the regulations thereunder (relating to certain married taxpayers living apart). A taxpayer who is treated as not married under this paragraph (b) is not required to take into account the earned income of the taxpayer's spouse for purposes of applying the earned income limitation on the amount of employment-related expenses under § 1.21-2(b).
-
Treas. Reg. §1.21-3(c)Death of married taxpayer.
Death of married taxpayer. If a married taxpayer dies during the taxable year and the survivor may make a joint return with respect to the deceased spouse under section 6013(a)(3), the credit is allowed for the year only if a joint return is made. If, however, the surviving spouse remarries before the end of the taxable year in which the deceased spouse dies, a credit may be allowed on the decedent spouse's separate return.
-
Treas. Reg. §1.21-4Payments to certain related individuals
(a) In general. A credit is not allowed under section 21 for any amount paid by the taxpayer to an individual—
(1) For whom a deduction under section 151(c) (relating to deductions for personal exemptions for dependents) is allowable either to the taxpayer or the taxpayer's spouse for the taxable year;
(2) Who is a child of the taxpayer (within the meaning of section 152(f)(1) for taxable years beginning after December 31, 2004, and section 151(c)(3) for taxable years beginning before January 1, 2005) and is under age 19 at the close of the taxable year;
(3) Who is the spouse of the taxpayer at any time during the taxable year; or
(4) Who is the parent of the taxpayer's child who is a qualifying individual described in § 1.21-1(b)(1)(i) or (b)(2)(i).
(b) Payments to partnerships or other entities. In general, paragraph (a) of this section does not apply to services performed by partnerships or other entities. If, however, the partnership or other entity is established or maintained primarily to avoid the application of paragraph (a) of this section to permit the taxpayer to claim the credit, for purposes of section 21, the payments of employment-related expenses are treated as made directly to each partner or owner in proportion to that partner's or owner's ownership interest. Whether a partnership or other entity is established or maintained to avoid the application of paragraph (a) of this section is determined based on the facts and circumstances, including whether the partnership or other entity is established for the primary purpose of caring for the taxpayer's qualifying individual or providing household services to the taxpayer.
(c) Examples. The provisions of this section are illustrated by the following examples:
-
Treas. Reg. §1.21-4(a)In general.
In general. A credit is not allowed under section 21 for any amount paid by the taxpayer to an individual—
(1) For whom a deduction under section 151(c) (relating to deductions for personal exemptions for dependents) is allowable either to the taxpayer or the taxpayer's spouse for the taxable year;
(2) Who is a child of the taxpayer (within the meaning of section 152(f)(1) for taxable years beginning after December 31, 2004, and section 151(c)(3) for taxable years beginning before January 1, 2005) and is under age 19 at the close of the taxable year;
(3) Who is the spouse of the taxpayer at any time during the taxable year; or
(4) Who is the parent of the taxpayer's child who is a qualifying individual described in § 1.21-1(b)(1)(i) or (b)(2)(i).
138 Citing Cases
We disagree with petitioners’ claim that Congress “tweaked” the section 162 profit motive standard for purposes of section 183.
§ 21.3(d) (definition of “cabin site” for cabins located on federal conservation/recreation land); 43 C.F.R. § 8360.0-5(c) (defining “developed recreation sites and areas”); 43 C.F.R. §§ 8365 et seq. (rules of conduct for patrons of public recreation land). 51 [*51] wildlife, or plant community, or similar ecosystem normally lives will meet the co
Section 21 of each of the GMAC deeds of trust provides: Should the property or any part thereof be taken or damaged by reason of any public improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any other manner, the Beneficiary shall be entitled to all compensation, awards, and other payment or relief therefor * * *. All
Section 21 ofthe Act defines "financial provision" as a "provision available * * * under section 23 below for the purpose ofadjusting the financial position ofthe parties to a marriage * * * in connection with proceedings for divorce, nullity of marriage orjudicial separation". Matrimonial Causes Act 1973, c. 18, sec. 21(1) (Eng.). Section 23(1) of
21-323 (LexisNexis 2008). Nevertheless, a corporation subject to such automatic dissolution "continues its corporate existence" as necessary to wind up and liquidate its business and affairs. Il - 20 - failed to carry their burden ofshowing that Little Salt's existence discontinued or its obligation to make a Federal income tax return ended b
Bond & Indem. Co. v. Pappas, 741 N.E.2d 248 (Ill. 2000). During these auctions to sell thejudgment liens the participants will bid "penalty percentage" rates, rånging 4In 2007 Boo Noz Corp. was owned by the followingpersons or qntities with the following percentages ofownership: John Bridges (40%), Barrett Rochman (32%), Charles D
21-323 (LexisNexis 2008). Nevertheless, a corporation subject to such automatic dissolution "continues its corporate existence" as necessary to wind up and liquidate its business and affairs. Il - 20 - failed to carry their burden ofshowing that Little Salt's existence discontinued or its obligation to make a Federal income tax return ended b
Bond & Indem. Co. v. Pappas, 741 N.E.2d 248 (Ill. 2000). During these auctions to sell thejudgment liens the participants will bid "penalty percentage" rates, rånging 4In 2007 Boo Noz Corp. was owned by the followingpersons or qntities with the following percentages ofownership: John Bridges (40%), Barrett Rochman (32%), Charles D
21-323 (LexisNexis 2008). Nevertheless, a corporation subject to such automatic dissolution "continues its corporate existence" as necessary to wind up and liquidate its business and affairs. Il - 20 - failed to carry their burden ofshowing that Little Salt's existence discontinued or its obligation to make a Federal income tax return ended b
Bond & Indem. Co. v. Pappas, 741 N.E.2d 248 (Ill. 2000). During these auctions to sell thejudgment liens the participants will bid "penalty percentage" rates, rånging 4In 2007 Boo Noz Corp. was owned by the followingpersons or qntities with the following percentages ofownership: John Bridges (40%), Barrett Rochman (32%), Charles D
21-323 (LexisNexis 2008). Nevertheless, a corporation subject to such automatic dissolution "continues its corporate existence" as necessary to wind up and liquidate its business and affairs. Il - 20 - failed to carry their burden ofshowing that Little Salt's existence discontinued or its obligation to make a Federal income tax return ended b
21-20,157(4) (LexisNexis 2008 & Supp. 2014). 3. Trust Fund Doctrine Under the common law trust fund doctrine, “property of the corporation constitutes a trust fund in the hands of its officers and directors, and a transaction between them whereby the corporation’s property is diverted from the corporation to their own use and benefit will not
letter; and (4) drafting the board ofdirectors resolutions that would ratify the 19In a PwC memo regrading the "Singapore tax consequences ofthe * * * [reinvestment plan]", there is a briefdiscussion on Singapore corporate law. The memo states that sec. 21 ofthe Singapore Companies Act does not allow a subsidiary to hold shares ofits Singapore parent. 20The first draft ofthe representation letter was prepared by PwC and subsequently provided to Barnes for review. Barnes' CFO and other officers
ction 38(a) (general business credit applied as a "credit against the tax imposed"). And we have imposed penalties on disallowed credits against the tax under many provisions.1° In doing so, we necessarily reduced the amount shown as tax by the 9See sec. 21 (expenses for household and dependent care services necessary for gainful employment); sec. 22 (credit for the elderly and the permanently and totally disabled); sec. 23 (adoption expenses); sec. 24 (child tax credit); sec. 25 (interest on ce
und that E.P. was petitioner's qualifying child. At trial petitioner credibly testified that E.P. had a mental disability and that he lived with her for more than halfof2008. Therefore, E.P. was a qualifying individual for petitioner for purposes ofsection 21. Although petitioner credibly testified that she paid E.P.'s tuition, she does not remember how much she paid. She also did not introduce any records that established the amount she paid in 2008. Since petitioner did not substantiate her cl
21 (expenses for household and dependent care services necessary for gainful employment); sec. 22 (credit for the elderly and the permanently and totally disabled); sec. 23 (adoption expenses); sec. 24 (child tax credit); sec. 25 (interest on certain home mortgages); sec. 25A (hope and lifetime learning credits); sec. 25B (elective deferrals a
On September 21, 1995, Mr. Wall issued to PBR five supplemental type certificates that approved a number ofthe modifications that he helped to develop for Project 288. The approved modifications to the Twin Comanche design included the conversion ofits 14-volt electrical system to a 28-volt electrical system with dual alternators, as w
Child Care Credit, Child Tax Credit, and Additional Child Tax Credit In order for a taxpayerto claim a section 21 credit for expenses for household and dependent care services necessary for gainful employment (child care credit), a taxpayermust incur employment-related expenses on behalfof, as pertinent to this case, a dependent ofthe taxpayer as defined in section 152(a)(1)?
Dependent Care Credit Section 21 allows a credit to taxpayers with respect to whom there are one or more "qualifying individuals" equal to a percentage ofthe "employment-related expenses" paid by the taxpayerduring the taxable year.
In the notices ofdeficiency respondent disallowed the dependent care credit claimed by petitioners each year because they allegedly failed to establish that their children were qualifying individuals pursuant to section 21.
dges that upbn execution and recording ofthis l$reservation Easement, * * * [LPCI] shall be immediately vested wïth a real property interest in the Premises and that such iñterest of * * * [LPCI] shall have a stipùlated fair market value, for purposes of allocating net proceeds in an extinguishment pursuant to Section 21, equal to the ratio between the fair market value ofthe Preservation Easement and the fair market value ofthe Premises prior to considering the impact ofthe Preservation Easemen
On September 21, 1995, Mr. Wall issued to PBR five supplemental type certificates that approved a number ofthe modifications that he helped to develop for Project 288. The approved modifications to the Twin Comanche design included the conversion ofits 14-volt electrical system to a 28-volt electrical system with dual alternators, as w
Child Care Credit, Child Tax Credit, and Additional Child Tax Credit In order for a taxpayer to claim a section 21 credit for expenses for household and dependent care services necessary for gainful employment (child care credit), a taxpayer must incur employment-related expenses on behalf of, as pertinent to this case, a dependent of the taxpayer as defined in section 152(a)(1).
sThe Kuntzes have not claimed a credit under sec 21; which allows a taxpayer a credit for a percentage of the expenses of caring for a spouse who is 'physically or mentally incapable-of caring for himself or herself and who has the same principal place of abode as the taxpayer" if "such expenses are incurred to enable.the taxpayer to be gainfully employed".
addition, section 274(d) imposes stringent substantiation requirements for claimed deductions relating to the use of "listed property", which is defined under section 21t80F(d) (4) (A) (i) to include passenger automobiles .
Non-issues The surgical procedures involved in this case are startling, and to avoid distraction from the actual issues, it is expedient to affirm what is not at issue here : Neither the tax collector nor the Tax Court sits as aboard of medical review, as if it were reconsidering, validating, or overruling the medical profession's judgments about what medical care is appropriate or effective for what medical conditions .
21 - 1910 .269 (1997) ; applies to electric power generation, transmission, and distribution; and another, 29 C .F.R . sec . 1910 .302 (1997), applies to electric utilization systems . Again, the dividing line is control . First, the NESC (and not the NEC) controls here because the NESC governs street light assets that PP&L controlled . Under
121-201, "Cert fica e of limited part rship", provides : (a) In order to form a limited pa tner h p the eneral partners shall execute a par ners i agreement , nd a certificate of limited partner hip h 11 be xecuted in accordance with section 21-2 4 of this rticle .
- 7 - relevant here, the statute generally defines a head of household as an unmarried individual who maintains as his or her home a household which constitutes for more than one-half of the taxable year the principal place of abode of either a qualifying child (as defined in section 152(c )) or a dependent of the taxpayer with respect to whom the taxpayer is allowed a deduction under section 151 .
for herself and the other for her granddaughter, L.H. As noted supra note 2, petitioner claimed the child care credit, the child tax credit, the earned income credit, and head-of-household filing status. 2Petitioner claimed a child care credit under sec. 21 and the child tax credit under sec. 24. Both credits are allowable if the taxpayer is entitled to a dependency exemption deduction for a child. Accordingly, petitioner’s entitlement to these credits depends on the Court’s holding on the depen
n 162, the cost - 23 - of care for their child during working hours. See, e.g., O’Reilly v. Commissioner, T.C. Memo. 1974-261 (and cases cited therein). Congress has enacted a separate credit for child care expenses, which is currently embodied in section 21. Indeed, petitioners took advantage of that provision to claim a $30 credit on their 1999 tax return in addition to their Schedule C deductions. However, the rule set forth in O’Reilly still stands, and petitioners may not deduct the costs o
whether petitioner is entitled to a section 21 child care credit for taxable year 2003 ; 3 .
Petitioner did not establish either that she maintained a household or that she incurred employment-related expenses for the children, and, as the Court holds that she is not entitled to dependency exemption deductions for the three children, it follows that she is not entitled to the section 21 child care credit.
t has accrued since 1977 on their 1971 tax liability. Petitioners failed to pay the taxes reported on their 1971 income tax return, and those taxes were only satisfied when 15(...continued) necessary for the enforcement of the provisions of the Act, § 21a(15). 11 U.S.C. § 11(a)(15). 16Rule 39 provides: Rule 39. Pleading Special Matters A party shall set forth in the party’s pleading any matter constituting an avoidance or affirmative defense, including res judicata, collateral estoppel, estoppel
Petitioner claimed the expenses were paid to the service provider “Prestigious” and attached the required Form 2441, Child and Dependent Care Expenses, providing identifying information with respect to it on his 2000 tax return pursuant to section 21(e)(9).
151; (2) whether petitioner is entitled to head-of-household filing status under section 2(b); (3) whether petitioner is entitled to the earned income credit under section 32(a); and (4) whether petitioner is entitled to the child care credit under section 21. An additional adjustment, reducing the rate reduction credit claimed by petitioner under section 6428, is a computational adjustment that is resolved by the Court's holding on the contested issues. Some of the facts were stipulated. Those
Child Care Credit Section 21 provides for a credit for a percentage of the expenses for the care of a child under age 13 paid by an individual to enable the individual to be gainfully employed.
Petitioner claimed the expenses paid to Kuddle Korner and provided identifying information with respect to that service provider on her 1995 return pursuant to section 21(e)(9).
on Schedule A, Itemized Deductions, in addition to those allowed by respondent for all years at issue; (2) is not entitled to head-of-household filing status under sec. 2(b) for all years at issue; (3) is not entitled to the child care credit under sec. 21 for all years at (continued...) - 3 - (1) Whether petitioner received unreported income from the sale of tax shelters and insurance during 1982, 1983, 1984, 1985, 1986, and 1987 of $56,701, $46,744, $16,939, $27,783, $49,346, and $23,406, res
151; (2) whether petitioner is entitled to head-of- household filing status under section 2(b); (3) whether petitioner is entitled to the earned income credit under section 32(a); and (4) whether petitioner is entitled to the child care credit under section 21. Some of the facts were stipulated. Those facts, with the exhibits annexed thereto, are so found and are made part hereof. Petitioner's legal residence at the time the petition was filed was Dallas, Texas. On his Federal income tax return
At trial, respondent conceded petitioner's entitlement to a child care credit under section 21 for both years.
21- 2203 (1997); United States Natl. Bank v. Rupe, 296 N.W.2d 474 (Neb. 1980). A change in a professional corporation’s name does not change the underlying entity. See Neb. Rev. Stat. secs. 21- 2204, 21-20,116, 21-20,124 (1997). Likewise, changes in the ownership of the 1203 Partnership do not amount to a change in a party to the lease. See Ne
al’s spouse is not a member of such household, [then] such individual is not considered as married. 4 Sec. 32(d) expressly makes sec. 7703 applicable in determining whether an individual is married. Sec. 21(e) effectively incorporates sec. 7703 into sec. 21. See sec. 21(e)(1), (3), and (4). 5 Petitioner does not cite sec. 7703(b). Rather, she relies on IRS Pub. 596, Earned Income Credit, and the portion thereof dealing with married persons who live apart. We note that such portion of the publica
ses include child care services, such as nursery school. Sec. 1.44A-1(c)(3)(i), Income Tax Regs.2 As previously indicated, petitioner provided more than one- half of the cost of maintaining the household. Petitioner’s 2 Sec. 44A was redesignated as sec. 21 for tax years beginning after Dec. 31, 1983, pursuant to sec. 471(c)(1) of the Deficit Reduction Act of 1984, Pub. L. 98-369, 98 Stat. 826. - 9 - child care costs were incurred to care for Ayla, her qualifying child, while petitioner worked. A
The issues for decision are: (1) Whether petitioners are entitled to a section 21 child care credit in each of the years 1996 and 1997; and (2) whether petitioners are entitled to a dependency exemption deduction for Heche Singh in 1997.
Section 21 provides, in part, that an individual who maintains a household which includes as a member a qualifying individual - 6 - shall be allowed a credit based on the expenses for household services and dependent care services incurred to enable the taxpayer to be gainfully employed.
Section 21 provides, in part, that an individual who maintains a household which includes as a member one or more qualifying individuals shall be allowed a credit based on the expenses for household services and dependent care services incurred to enable the taxpayer to be gainfully employed.
Section 262 provides that no deduction is allowed for personal, living, or family expenses.
We conclude that, except for the fraud penalty under section 21Where a reply is not filed, the affirmative allegations in the answer are deemed to be denied unless the Commissioner, within 45 days after the expiration of the time for filing the reply, files a motion that specified allegations in the answer be deemed admitted.
. Cotton and Mr. Cotton),¹ the issues for ¹ Mr. Cotton concedes that he is not entitled to the following: (1) Head-of-household filing status under sec. 2(b) for 1994 and 1996; (2) single filing status for 1995; (3) dependent care credit pursuant to sec. 21 in the amount of $911 for 1994 (respondent erróneously categorized the credit as the child care credit under sec. 24, which did not go into effect until 1998); (4) Schedule C, Profit or Loss From Business, loss in the amount of $10,150 for 19
rned income of $400 per month for two or more qualifying persons.” This special rule, however, serves to ameliorate the earned income limitation on the amount of a taxpayer’s “employment-related expenses” for purposes of the child care credit under section 21; this special rule does not apply in determining the amount of a taxpayer’s earned income for purposes of the earned income credit under section 32.
92 (S.D. 1980), the South Dakota Supreme Court stated that, while the "sole object of compensatory damages is to make the injured party whole", the "purpose of awarding punitive damages is to punish - 5 - the wrongdoer." See also S.D. Codified Laws sec. 21-3-2 (Michie Supp. 2000) (the jury, in addition to the actual damage, may give punitive damages for the sake of example, and by way of punishing the defendant); Veeder v. Kennedy, 589 N.W.2d 610, 622 (S.D. 1999) (punitive damages may properly b
Child Care Expenses Pursuant to section 21, petitioner reported child and dependent care expenses of $4,800 for two children, and claimed a credit of $1,056.
. Cotton and Mr. Cotton),¹ the issues for ¹ Mr. Cotton concedes that he is not entitled to the following: (1) Head-of-household filing status under sec. 2(b) for 1994 and 1996; (2) single filing status for 1995; (3) dependent care credit pursuant to sec. 21 in the amount of $911 for 1994 (respondent erroneously categorized the credit as the child care credit under sec. 24, which did not go into effect until 1998); (4) Schedule C, Profit or Loss From Business, loss in the amount of $10,150 for 19
ing under the laws of the United Kingdom. During 1992, a corporation that resided in the United Kingdom was required to pay tax to the United Kingdom at the rate of 33 percent on its corporate income (mainstream tax). See Finance (No. 2) Act, 1992, sec. 21. Additionally, a corporation that paid a dividend to its shareholders was obligated to pay to the United Kingdom ACT. See Income and Corporation Taxes Act, 1988, sec. 14(1) (Eng.) Generally, upon payment of the ACT, a U.K. corporation becomes
A “document” for this - 7 - purpose includes a regulation. 1 C.F.R. sec. 1.1 (1999). Petitioner points out that the regulations under title 27 of the Code of Federal Regulations, containing regulations pertaining to the Bureau of Alcohol, Tobacco, and Firearms, comply with this provision, but the regulations under title 26 of th
oner's proper filing status for the years in issue is single. Respondent is sustained on this issue. 3. Dependent Care Credits The third issue for decision is whether petitioner is entitled to the claimed child and dependent care credits pursuant to section 21. Petitioner reported child and dependent care expenses of $4,800 in both years in issue and claimed credits in the amount of $1,008 and $960 for 1995 and 1996, respectively. Respondent disallowed the credits due to (1) petitioner's lack of
ting under the laws of the United Kingdom. During 1992, a corporation that resided in the United Kingdom was required to pay tax to the United Kingdom at the rate of 33 percent on its corporate income (mainstream tax). See Finance (No. 2) Act, 1992, sec. 21. Additionally, a corporation that paid a dividend to its shareholders was obligated to pay to the United Kingdom ACT. See Income and Corporation Taxes Act, 1988, sec. 14(1) (Eng.). Generally, upon payment of the ACT, a U.K. corporation become
Specifically, Section 16 lost $2,600; Section 18 lost $3,500; Section 20 lost $65,973.87; Section 21 lost $22,000 and Section 23 lost $37,816.60.
85 1990 12,800 2,383.00 1991 6,984 981.00 1992 6,881 1,984.00 After concessions by the parties, the issues remaining for decision are: (1) Whether Mary Ann Collins (petitioner) overstated gross receipts or sales income from her trade or business activity for the years 1989 and 1990; (2) whether petitioners are entitled to a child care credit under section 21 1 Unless otherwise indicated, section references are to the Internal Revenue Code in effect for the years at issue.
Izen dated December 17, 1984, declaring petitioner's involuntary dissolution due to its failure to file an annual statement for the year 1984 as required by section 21 of the Texas Professional Association Act, Tex.
On petitioner's 1992 Federal return, he claimed a credit under section 21 for child and dependent care expenses in the amount of $560.
The warranty deed 9 to the property that was recorded describes the property in question as-- That portion of the West Half of the Southwest Quarter of Section 21, Township 11 North, Range 1 East of the Fourth Principal Meridian, Knox County, Illinois, which is Lot 1 of the Hillyers Excavating Subdivision, as per plat dated December 20, 1991, by Paul M.
The warranty deed 9 to the property that was recorded describes the property in question as-- That portion of the West Half of the Southwest Quarter of Section 21, Township 11 North, Range 1 East of the Fourth Principal Meridian, Knox County, Illinois, which is Lot 1 of the Hillyers Excavating Subdivision, as per plat dated December 20, 1991, by Paul M.
4.Child Care Credits Section 21 (a) allows a credit for a "percentage of the employment-related expenses * * * paid by * * * [an] individual during the taxable year" if the individual maintains a household that includes "one or more qualifying individuals".