115 STAT. 50 PUBLIC LAW 107-16-JUNE 7, 2001 Applicability. (c) EFFECTIVE DATE. —The amendments made by this section 26 USC 21 note. shall apply to taxable years beginning after December 31, 2002. SEC. 205. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD CARE ASSISTANCE. (a) IN GENERAL.— Subpart D of part IV of subchapter A of chapter 1 (relating to business related credits), as amended by section 619, is further amended by adding at the end the following: " SEC. 45F. EMPLOYER-PROVIDED CHILD CARE CREDIT. "(a) IN GENERAL.— For purposes of section 38, the employerprovided child care credit determined under this section for the taxable year is an amount equal to the sum of— "(1) 25 percent of the qualified child care expenditures, and "(2) 10 percent of the qualified child care resource and referral expenditures, of the taxpayer for such taxable year. "(b) DOLLAR LIMITATION.—The credit allowable under subsection (a) for any taxable year shall not exceed $150,000. "(c) DEFINITIONS.— For purposes of this section— "(1) QUALIFIED CHILD CARE EXPENDITURE.— "(A) IN GENERAL.— The term 'qualified child care expenditure' means any amount paid or incurred— "(i) to acquire, construct, rehabilitate, or expand property— "(I) which is to be used as part of a qualified child care facility of the taxpayer, "(II) with respect to which a deduction for depreciation (or amortization in lieu of depreciation) is allowable, and "(III) which does not constitute part of the principal residence (within the meaning of section 121) of the taxpayer or any employee of the taxpayer, "(ii) for the operating costs of a qualified child care facility of the taxpayer, including costs related to the training of employees, to scholarship programs, and to the providing of increased compensation to employees with higher levels of child care training, or "(iii) under a contract with a qualified child care facility to provide child care services to employees of the taxpayer. "(B) FAIR MARKET VALUE.— The term 'qualified child care expenditures' shall not include expenses in excess of the fair market value of such care. " (2) QUALIFIED CHILD CARE FACILITY. — "(A) IN GENERAL.—The term 'qualified child care facility' means a facility— "(i) the principal use of which is to provide child care assistance, and "(ii) which meets the requirements of all applicable laws and regulations of the State or local government in which it is located, including the licensing of the facility as a child care facility.
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