PUBLIC LAW 94-455—OCT. 4, 1976
90 STAT. 1563
SEC. 504. CREDIT FOR CHILD CARE EXPENSES. (a) ALLOWANCES OF CREDIT FOR C H I L D CARE E X P E N S E S. —
(1) IN GENERAL.—Subpart A of part IV of subchapter A of chapter 1 (relating to credits allowable) is amended by inserting before section 45 the following new section: "SEC. 44A. EXPENSES FOR HOUSEHOLD AND DEPENDENT CARE SERV- 26 USC 44A. ICES NECESSARY FOR GAINFUL EMPLOYMENT. "(a)
ALLOWANCE OF C R E D I T. — I n the case of a n i n d i v i d u a l who
maintains a household which includes as a member one or more qualifying individuals (as defined in subsection (c)(1)), there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 20 percent of the employment-related expenses (as defined in subsection (c)(2)) paid by such individual during the taxable year. " (b) APPLICATION W I T H OTHER CREDITS.—The credit allowed by
subsection (a) shall not exceed the amount of the tax imposed by this chapter for the taxable year reduced by the sum of the credits allowable under— " (1) section 33 (relating to foreign tax c r e d i t), Post, P- 1643. " (2) section 37 (relating to credit for the elderly), ^"^^' P- l^^^" (3) section 38 (relating to investment in certain depreciable property), " (4) section 40 (relating to expenses of work incentive programs), " (5) section 41 (relating to contributions to candidates for public office), " (6) section 42 (relating to general tax c r e d i t), and " (7) section 44 (relating to purchase of new principal residence). " (c) DEFINITIONS OF QUALIFYING INDIVIDUAL AND EMPLOYMENT EELATED E X P E N S E S. — For purposes of t h i s section— " (1) QUALIFYING INDIVIDUAL.—The term 'qualifying individ-
ual' means— " (A) a dependent of the taxpayer who is under the age of 15 and with respect to whom the taxpayer is entitled to a deduction under section 151(e), " (B) a dependent of the taxpayer w h o is physically or mentally incapable of caring for himself, or " (C) the spouse of the taxpayer, if he is physically or mentally incapable of caring for himself. " (2) EMPLOYMENT-RELATED EXPENSES.—
" (A) IN GENERAL.—The term 'employment-related expenses' means amounts paid for the following expenses, b u t only if such expenses a r e 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 tax p a y e r: " (i) expenses for household services, and " ( i i) expenses for the care of a qualifying individual. " (B) EXCEPTION.—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). " (d) DOLLAR L I M I T ON A M O U N T CREDITABLE.—The a m o u n t of the
employment-related expenses incurred during any taxable year which may be taken into account under subsection (a) shall not exceed—
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