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items such as clothing, education, and medical treatment. Sec.
1.2-2(d), Income Tax. Regs.
We found petitioner and Mr. Stephan to be credible and
forthright witnesses. Based on all the evidence, we conclude
that petitioner paid more than one-half of the expenses for her
household. Accordingly, petitioner qualifies for the head-of-
household filing status for 1997 and 1998.
The next issue for decision is whether petitioner is
entitled to child care credits for 1997 and 1998. Under section
21(a)(1), a taxpayer who maintains a household may receive as a
credit a certain percentage of employment-related expenses for a
qualifying individual. A qualifying individual includes a child
under the age of 13 who is a dependent of the taxpayer under
section 152 for the purpose of the section 151(c) dependency
exemption deduction. Sec. 21(b)(1)(A).
Employment-related expenses are those incurred to care for a
qualifying individual, but only if they are incurred to enable
the taxpayer to be gainfully employed. Sec. 21(b)(2)(A)(ii).
These expenses 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.
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