- 7 - 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, including expenses incurred for the care of a qualifying individual. 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. Finally, taxpayers who are allowed a dependency exemption deduction under section 151 may be allowed a child tax credit under section 24. As stated above, the Court sustains respondent’s determination that petitioner was not entitled to deduct dependency exemptions for the three children who lived with her. Because petitioner is not entitled to the dependency exemption deductions, she is not entitled to the child tax credit under section 24. Reviewed and adopted as the report of the Small Tax Case Division. Decision will be entered for respondent.Page: Previous 1 2 3 4 5 6 7 8
Last modified: May 25, 2011