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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.
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Last modified: May 25, 2011