- 14 - includes one or more qualifying individuals. The amount of the credit is equal to the applicable percentage of the employment- related expenses paid by the individual. Sec. 21(a). The term "qualifying individual" under section 21(b) includes a dependent of the taxpayer under age 13 with respect to whom the taxpayer is entitled to a dependency deduction under section 151(c). The allowable credit, under section 21(b)(2), generally is based upon employment-related expenses that are incurred to enable the taxpayer to be gainfully employed. The term "employment-related expense" includes expenses for household services and expenses for the care of a qualifying individual. Sec. 21(b)(2)(A). Employment-related expenses are explained in section 1.44A- 1(c)(2), Income Tax Regs. Sec. 1.44A-1(c). Employment-related expenses-- (2) Household services. Expenses are considered to be paid for household services if they are paid for the performance in and about the taxpayer's home of ordinary and usual services necessary to the maintenance of the household. However, expenses are not considered as paid for household services unless the expenses are attributable in part to the care of the qualifying individual. Thus, amounts paid for the services of a domestic maid or cook are considered to be expenses paid for household services if a part of those services is provided to the qualifying individual.* * * The term "household services" includes both cleaning and cooking, probably the two services most commonly thought of as household services. Small v. Commissioner, 60 TC 719, 727 (1973), affd. without published opinion (75-2 USMC par. 9512, 10th Cir. October 9, 1974, 35,AFTR 2d 75-1383); sec. 1.44A-1(c)(7), Example (3),Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011