§ 21. Expenses for household and dependent care services necessary for gainful employment

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1976

   Pub. L. 94–455 title V § 504(a)(1) · 90 Stat. 1520

   Enacted · 26 U.S.C. § 21

   Added Pub. L. 94–455, title V, § 504(a)(1), Oct. 4, 1976, 90 Stat. 1563, § 44A

   Source evidence

   Code source credit
   Added Pub. L. 94–455, title V, § 504(a)(1), Oct. 4, 1976, 90 Stat. 1563, § 44A

   Enacted provision · exact public law section
   (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 SERVICES NECESSARY FOR GAINFUL EMPLOYMENT. “(a) Allowance of Credit.— In the case of an individual 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 ¿0 percent of the employment-related expenses (as defined in subsection (c)(2)) paid by such individual during the taxable year. “(b) Application With 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 stun of the credits allowable under— “(1) section 33 (relating to foreign tax credit), Post, p. 1643. Ante, p. 1559. “(2) section 37 (relating to credit for the elderly). “(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 credit), and “(7) section 44 (relating to purchase of new principal residence). “(c) Definitions of Qualifying Individual and Employment-Related Expenses.— For purposes of this section— “(1) Qualifying individual.— The term ‘qualifying individual means— “(A) a dependent of the taxpayer who is under the ago of 15 and with respect to whom the taxpayer is entitled to a deduction under section 151(e), “(B) a dependent of the taxpayer who 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, but only if such expenses are 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 taxpayer: “(i) expenses for household services, and “(ii) 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 Limit on Amount Creditable.— The amount of the employment-related expenses incurred during any taxable year which may be taken into account under subsection (a) shall not exceed— “(1) $2,000 if there is 1 qualifying individual with respect to the taxpayer for such taxable year, or “(2) $4,000 if there are 2 or more qualifying individuals with respect to the taxpayer for such taxable year. “(e) Earned Income Limitation.— “(1) In general.— Except as otherwise provided in this subsection, the amount of the employment-related expenses incurred during any taxable year which may be taken into account under subsection (a) shall not exceed— “(A) in the case of an individual who is not married at the close of such year, such individual’s earned income for such year, or “(B) in the case of an individual who is married at (be close of such year, the lesser of such individual’s earned income or the earned income of his spouse for such year, “(2) Special rule for spouse who is a student or incapable of caring for himself.— In the case of a spouse who is a student or a qualifying individual described in Subsection (c)(1)(C), for purposes of paragraph (1), such spouse shall be deemed for each month during which such spouse is a full-time student at an educational institution, or is such a qualifying individual, to be gainfully employed and to have earned income of not less than— “(A) $166 if subsection (d)(1) applies for the taxable year, or “(B) $333 if subsection (d)(2) applies for the taxable year. In the case of any husband and wife, this paragraph shall apply with respect, to only one spouse for any one month. “(f) Special Rules.— For purposes of this section— “(1) Maintaining household.— An individual shall be treated as maintaining a household for any period only if over half the cost of maintaining the household for such period is furnished by such individual (or, if such individual is married during such period, is furnished by such individual and his spouse). “(2) Married couples must file joint return.— If tile tax-payer is married at the close of the taxable year, the credit shall be allowed under subsection (a) only if the taxpayer and Ids spouse file a joint return for the taxable year. “(3) Marital status.— An individual legally separated from his spouse under a decree of divorce or of separate maintenance shall not be considered as married. “(4) Certain married individuals living apart.— If— “(A) an individual who is married and who files a separate return— “(i) maintains as his home a household which constitutes for more than one-half of the taxable year the principal place of abode of a qualifying individual, and “(ii) furnishes over half of the cost of maintaining such household during the taxable year, and “(B) during the last 6 months of such taxable year such individual’s spouse is not a member of such household, such individual shall not be considered as married. “(5) Special dependency test in case of divorced parents, etc.— If— “(A) a child (as defined in section 151(e)(3)) who is under the age of 15 or who is physically or mentally incapable of caring for himself receives over half of his support during the calendar year from his parents who are divorced or legally separated under a decree of divorce or separate maintenance or who are separated under a written separation agreement, and “(B) such child is hi the custody of one or both of his parents for more than one-half of the calendar year, in the case of any taxable, year beginning in such calendar year such child shall be treated as being a qualifying individual described in subparagraph (A) or (B) of subsection (c)(1). as the case may be with respect to that parent who has custody for a longer period during such calendar year than the other parent, and shall not be treated as being a qualifying individual with respect, to such other parent. “(6) Payments to related individuals.— “(A) In general.— Except as provided in subparagraph (B), no credit, shall be allowed under subsection (a) for any amount paid by the taxpayer to an individual bearing a relationship to the taxpayer described in paragraphs (1) through (8) of section 152(a) (relating to definition of dependent) or to a dependent described in paragraph (9) of such section. “(B) Exception.— Subparagraph (A) shall not apply to any amount paid by the taxpayer to an individual with respect to whom, for the taxable year of the taxpayer in which the service is performed, neither the taxpayer nor his spouse is entitled to a deduction under section 151(e) (relating to deduction for personal exemptions for dependents), but only if the service with respect to which such amount is paid constitutes employment within the meaning of section 3121(b). “(7) Student.— The term ‘student’ means an individual who “Student.” during each of 5 calendar months during the taxable year is a full-time student at an educational organization. “(8) Educational organization.— The term ‘educational organization’ “Educational organization.” means an educational organization described in section 170(b)(1)(A)(ii). “(g) Regulations.— The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section.”

2. 1978

   Pub. L. 95–600 title I § 121(a) · 92 Stat. 2763

   Substituted · 26 U.S.C. § 21(f)(6)

   Pub. L. 95–600 substituted provision disallowing a credit for any amount paid by a taxpayer to an individual with respect to whom, for the taxable year, a deduction under section 151(e) is allowable either to the taxpayer or his spouse or who is a child of the taxpayer who has not attained the age of 19 at the close of the taxpayer year and defining “taxpayer year” for provision disallowing a credit for any amount paid by the taxpayer to an individual bearing a relationship described in section 152(a)(1) through (8), or a dependent described in section 152(a)(9), except that a credit was allowed for an amount paid by a taxpayer to an individual with respect to whom, for the taxable year of the taxpayer in which the service was performed, neither the taxpayer nor his spouse was entitled to a deduction under section 151(e), provided the service constituted employment within the meaning of section 3121(b)

   Source evidence

   Code amendment note
   Subsec. (f)(6). Pub. L. 95–600 substituted provision disallowing a credit for any amount paid by a taxpayer to an individual with respect to whom, for the taxable year, a deduction under section 151(e) is allowable either to the taxpayer or his spouse or who is a child of the taxpayer who has not attained the age of 19 at the close of the taxpayer year and defining “taxpayer year” for provision disallowing a credit for any amount paid by the taxpayer to an individual bearing a relationship described in section 152(a)(1) through (8), or a dependent described in section 152(a)(9), except that a credit was allowed for an amount paid by a taxpayer to an individual with respect to whom, for the taxable year of the taxpayer in which the service was performed, neither the taxpayer nor his spouse was entitled to a deduction under section 151(e), provided the service constituted employment within the meaning of section 3121(b).

   Enacted provision · exact public law section
   (a) In General.— Paragraph (6) of section 44A(f) (relating to payments 26 USC 44A. to related individuals) is amended to read as follows: “(6) Payments to related individuals.— No credit shall be allowed under subsection (a) for any amount paid by the tax-payer to an individual— “(A) with respect to whom, for the taxable year, a deduction under section 151(e) (relating to deduction for personal 26 USC 151. exemptions for dependents) is allowable either to the tax-payer or his spouse, or “(B) who is a child of the taxpayer (within the meaning of section 151(e)(3)) who has not attained the age of 19 at the close of the taxable year. For purposes of this paragraph, the term ‘taxable year’ means “Taxable year.” the taxable year of the taxpayer in which the service is performed.”

3. 1981

   Economic Recovery Tax Act of 1981

   Pub. L. 97–34 § 124(a) · 95 Stat. 175

   1. Amended · 26 U.S.C. § 21(a)

      Pub. L. 97–34, § 124(a), designated existing provisions as par. (1)

   2. Substituted · 26 U.S.C. § 21(a)

      Pub. L. 97–34, § 124(a), substituted “the applicable percentage” for “20 percent” in par. (1) as so designated

   3. Added · 26 U.S.C. § 21(a)

      Pub. L. 97–34, § 124(a), added par. (2)

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 97–34, § 124(a), designated existing provisions as par. (1), substituted “the applicable percentage” for “20 percent” in par. (1) as so designated, and added par. (2).

   Enacted provision · exact public law section
   (a) Increase in Percentage of Expenses Allowed as Credit.— Subsection (a) of section 44A (relating to expenses for household and 26 USC 44A. dependent care services necessary for gainful employment) is amended to read as follows: “(a) Allowance of Credit.— “(1) In general.— In the case of an individual 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 the applicable percentage of the employment-related expenses (as defined in subsection (c)(2)) paid by such individual during the taxable year. “(2) Applicable percentage defined.— For purposes of paragraph (1), the term ‘applicable percentage’ means 30 percent reduced (but not below 20 percent) by 1 percentage point for each $2,000 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year exceeds $10,000.”

4. 1981

   Economic Recovery Tax Act of 1981

   Pub. L. 97–34 § 124(c) · 95 Stat. 175

   1. Amended · 26 U.S.C. § 21(c)(2)(B)

      Pub. L. 97–34, § 124(c), designated existing provisions as cl. (i)

   2. Added · 26 U.S.C. § 21(c)(2)(B)

      Pub. L. 97–34, § 124(c), added cl. (ii)

   Source evidence

   Code amendment note
   Subsec. (c)(2)(B). Pub. L. 97–34, § 124(c), designated existing provisions as cl. (i) and added cl. (ii).

   Enacted provision · exact public law section
   (c) Credit Allowed for Certain Services Outside the Taxpayer’s Household.— Subparagraph (B) of section 44A(c)(2) is amended to read as follows: “(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— “(i) a qualifying individual described in paragraph (1)(A), or “(ii) a qualifying individual (not described in paragraph (1)(A)) who regularly spends at least 8 hours each day in the taxpayer’s household.”

5. 1981

   Economic Recovery Tax Act of 1981

   Pub. L. 97–34 § 124(d) · 95 Stat. 175

   Added · 26 U.S.C. § 21(c)(2)(C); 26 U.S.C. § 21(c)(2)(D)

   Pub. L. 97–34, § 124(d), added subpars. (C) and (D)

   Source evidence

   Code amendment note
   Subsec. (c)(2)(C), (D). Pub. L. 97–34, § 124(d), added subpars. (C) and (D).

   Enacted provision · exact public law section
   (d) Day Care Centers Must Meet State Law Requirements.— Paragraph (2) of section 44A(c) (defining emplo3niient-related expenses) is amended by adding at the end thereof the following new subparagraphs: “(C) Dependent care centers.— Employment-related expenses described in subparagraph (A) which are incurred for services provided outside the taxpayer’s household by a dependent care center (as defined in subparagraph (D)) shall be taken into account only if— “(i) such center complies with all applicable laws and regulations of a State or unit of local government, and (ii) the requirements of subparagraph (B) are met. “(D) Dependent Care Center Defined.— For purposes of this paragraph, the term ‘dependent care center’ means any facility which— “(i) provides care for more than six individuals (other than individuals who reside at the facility), and “(ii) receives a fee, payment, or grant for providing services for any of the individuals (regardless of whether such facility is operated for profit).”

6. 1981

   Economic Recovery Tax Act of 1981

   Pub. L. 97–34 § 124(b)(1)(A) · 95 Stat. 175

   Substituted · 26 U.S.C. § 21(d)(1)

   Pub. L. 97–34, § 124(b)(1)(A), substituted “$2,400” for “$2,000”

   Source evidence

   Code amendment note
   Subsec. (d)(1). Pub. L. 97–34, § 124(b)(1)(A), substituted “$2,400” for “$2,000”.

   Enacted provision · exact public law section
   (A) by striking out “$2,000” and inserting in lieu thereof “$2,400”, and

7. 1981

   Economic Recovery Tax Act of 1981

   Pub. L. 97–34 § 124(b)(1)(B) · 95 Stat. 175

   Substituted · 26 U.S.C. § 21(d)(2)

   Pub. L. 97–34, § 124(b)(1)(B), substituted “$4,800” for “$4,000”

   Source evidence

   Code amendment note
   Subsec. (d)(2). Pub. L. 97–34, § 124(b)(1)(B), substituted “$4,800” for “$4,000”.

   Enacted provision · exact public law section
   (B) by striking out “$4,000” and inserting in lieu thereof “$4,800”.

8. 1981

   Economic Recovery Tax Act of 1981

   Pub. L. 97–34 § 124(b)(2)(A) · 95 Stat. 175

   Substituted · 26 U.S.C. § 21(e)(2)(A)

   Pub. L. 97–34, § 124(b)(2)(A), substituted “$200” for “$166”

   Source evidence

   Code amendment note
   Subsec. (e)(2)(A). Pub. L. 97–34, § 124(b)(2)(A), substituted “$200” for “$166”.

   Enacted provision · exact public law section
   (A) by striking out “$166” and inserting in lieu thereof “$200”, and

9. 1981

   Economic Recovery Tax Act of 1981

   Pub. L. 97–34 § 124(b)(2)(B) · 95 Stat. 175

   Substituted · 26 U.S.C. § 21(e)(2)(B)

   Pub. L. 97–34, § 124(b)(2)(B), substituted “$400” for “$333”

   Source evidence

   Code amendment note
   Subsec. (e)(2)(B). Pub. L. 97–34, § 124(b)(2)(B), substituted “$400” for “$333”.

   Enacted provision · exact public law section
   (B) by striking out “$333” and inserting in lieu thereof “$400”.

10. 1983

    Pub. L. 98–21 title I § 122(c)(1) · 97 Stat. 65

    Substituted · 26 U.S.C. § 21(b)(2)

    Pub. L. 98–21 substituted “relating to credit for the elderly and the permanently and totally disabled” for “relating to credit for the elderly”

    Source evidence

    Code amendment note
    Subsec. (b)(2). Pub. L. 98–21 substituted “relating to credit for the elderly and the permanently and totally disabled” for “relating to credit for the elderly”.

    Enacted provision · exact public law section
    (1) Sections 41(b)(2), 44A(b)(2), 46(a)(4)(B), 53(a)(2), and 904(g) of 26 USC 41, 44A, 46, 53, 904. such Code are each amended by striking out “relating to credit for the elderly” and inserting in lieu thereof “relating to credit for the elderly and the permanently and totally disabled”.

11. 1984

    Tax Reform Act of 1984

    Pub. L. 98–369 § 471(c) · 98 Stat. 494

    Changed · 26 U.S.C. § 21

    Pub. L. 98–369, § 471(c), renumbered section 44A of this title as this section

    Source evidence

    Code amendment note
    Pub. L. 98–369, § 471(c), renumbered section 44A of this title as this section.

    Enacted provision · exact public law section
    (c) Sections Moved to Appropriate Place in Part IV.— (1) Designation.— The following sections of such part IV are henceforth to be designated in accordance with the following table: Old section number: New section number: New subpart designation:  44A  21 A  37  22 A  44C  23 A  41  24 A  33  27 B  44H  28 B  44D  29 B  44F  30 B  31  31 C  43  32 C  32  33 C  39  34 C  45  35 C  44E  40 D  44G  41 D (2) Placed in appropriate subparts.— Each section for which paragraph (1) provides a new section number is hereby moved to the appropriate place in the appropriate subpart of such part IV.

12. 1984

    Tax Reform Act of 1984

    Pub. L. 98–369 § 474(c)(2) · 98 Stat. 494

    1. Substituted · 26 U.S.C. § 21(a)(1)

       Pub. L. 98–369, § 474(c)(2), (3), substituted “subsection (b)(1)” for “subsection (c)(1)”

    2. Substituted · 26 U.S.C. § 21(a)(1)

       Pub. L. 98–369, § 474(c)(2), (3), substituted “subsection (b)(2)” for “subsection (c)(2)”

    Source evidence

    Code amendment note
    Subsec. (a)(1). Pub. L. 98–369, § 474(c)(2), (3), substituted “subsection (b)(1)” for “subsection (c)(1)” and “subsection (b)(2)” for “subsection (c)(2)”.

    Enacted provision · exact public law section
    (2) by striking out “subsection (c)(1)” in subsection (a) and inserting in lieu thereof “subsection (b)(1)”,

13. 1984

    Tax Reform Act of 1984

    Pub. L. 98–369 § 474(c)(1) · 98 Stat. 494

    Redesignated · 26 U.S.C. § 21(b)

    Pub. L. 98–369, § 474(c)(1), redesignated subsec. (c) as (b). Former subsec. (b), which provided that the credit allowed by subsec. (a) could not exceed the amount of the tax imposed by this chapter for the taxable year reduced by the sum of the credits allowable under sections 33, 37, 38, 40, 41, 42, and 44, was struck out

    Source evidence

    Code amendment note
    Subsec. (b). Pub. L. 98–369, § 474(c)(1), redesignated subsec. (c) as (b). Former subsec. (b), which provided that the credit allowed by subsec. (a) could not exceed the amount of the tax imposed by this chapter for the taxable year reduced by the sum of the credits allowable under sections 33, 37, 38, 40, 41, 42, and 44, was struck out.

    Enacted provision · exact public law section
    (1) by striking out subsection (b) and by redesignating subsections (c), (d), (e), (f), and (g) as subsections (b), (c), (d), (e), and (f), respectively,

14. 1984

    Tax Reform Act of 1984

    Pub. L. 98–369 § 474(c)(1) · 98 Stat. 494

    Redesignated · 26 U.S.C. § 21(c)

    Pub. L. 98–369, § 474(c)(1), redesignated subsec. (d) as (c). Former subsec. (c) redesignated (b)

    Source evidence

    Code amendment note
    Subsec. (c). Pub. L. 98–369, § 474(c)(1), redesignated subsec. (d) as (c). Former subsec. (c) redesignated (b).

    Enacted provision · exact public law section
    (1) by striking out subsection (b) and by redesignating subsections (c), (d), (e), (f), and (g) as subsections (b), (c), (d), (e), and (f), respectively,

15. 1984

    Tax Reform Act of 1984

    Pub. L. 98–369 § 474(c)(1) · 98 Stat. 494

    Redesignated · 26 U.S.C. § 21(d)

    Pub. L. 98–369, § 474(c)(1), redesignated subsec. (e) as (d). Former subsec. (d) redesignated (c)

    Source evidence

    Code amendment note
    Subsec. (d). Pub. L. 98–369, § 474(c)(1), redesignated subsec. (e) as (d). Former subsec. (d) redesignated (c).

    Enacted provision · exact public law section
    (1) by striking out subsection (b) and by redesignating subsections (c), (d), (e), (f), and (g) as subsections (b), (c), (d), (e), and (f), respectively,

16. 1984

    Tax Reform Act of 1984

    Pub. L. 98–369 § 474(c)(4) · 98 Stat. 494

    Substituted · 26 U.S.C. § 21(d)(2)

    Pub. L. 98–369, § 474(c)(4), substituted “subsection (b)(1)(C)” for “subsection (c)(1)(C)” in introductory provisions

    Source evidence

    Code amendment note
    Subsec. (d)(2). Pub. L. 98–369, § 474(c)(4), substituted “subsection (b)(1)(C)” for “subsection (c)(1)(C)” in introductory provisions.

    Enacted provision · exact public law section
    (4) by striking out “subsection (c)(1)(C)” in paragraph (2) of subsection (d) (as redesignated by paragraph (1)) and inserting in lieu thereof “subsection (b)(1)(C)”,

17. 1984

    Tax Reform Act of 1984

    Pub. L. 98–369 § 474(c)(5) · 98 Stat. 494

    Substituted · 26 U.S.C. § 21(d)(2)(A)

    Pub. L. 98–369, § 474(c)(5), substituted “subsection (c)(1)” for “subsection (d)(1)”

    Source evidence

    Code amendment note
    Subsec. (d)(2)(A). Pub. L. 98–369, § 474(c)(5), substituted “subsection (c)(1)” for “subsection (d)(1)”.

    Enacted provision · exact public law section
    (5) by striking out “subsection (d)(1)” in subparagraph (A) of subsection (d)(2) (as redesignated by paragraph (D) and inserting in lieu thereof, “subsection (c)(1)”,

18. 1984

    Tax Reform Act of 1984

    Pub. L. 98–369 § 474(c)(6) · 98 Stat. 494

    Substituted · 26 U.S.C. § 21(d)(2)(B)

    Pub. L. 98–369, § 474(c)(6), substituted “subsection (c)(2)” for “subsection (d)(2)

    Source evidence

    Code amendment note
    Subsec. (d)(2)(B). Pub. L. 98–369, § 474(c)(6), substituted “subsection (c)(2)” for “subsection (d)(2).

    Enacted provision · exact public law section
    (6) by striking out “subsection (d)(2)” in subparagraph (B) of subsection (d)(2) (as redesignated by paragraph (D) and inserting in lieu thereof “subsection (c)(2)”, and

19. 1984

    Tax Reform Act of 1984

    Pub. L. 98–369 § 474(c)(1) · 98 Stat. 494

    Redesignated · 26 U.S.C. § 21(e)

    Pub. L. 98–369, § 474(c)(1), redesignated subsec. (f) as (e). Former subsec. (e) redesignated (d)

    Source evidence

    Code amendment note
    Subsec. (e). Pub. L. 98–369, § 474(c)(1), redesignated subsec. (f) as (e). Former subsec. (e) redesignated (d).

    Enacted provision · exact public law section
    (1) by striking out subsection (b) and by redesignating subsections (c), (d), (e), (f), and (g) as subsections (b), (c), (d), (e), and (f), respectively,

20. 1984

    Tax Reform Act of 1984

    Pub. L. 98–369 § 474(c)(7) · 98 Stat. 494

    Substituted · 26 U.S.C. § 21(e)(5)

    Pub. L. 98–369, § 474(c)(7), substituted “subsection (b)(1)” for “subsection (c)(1)” in provisions following subpar. (B)

    Source evidence

    Code amendment note
    Subsec. (e)(5). Pub. L. 98–369, § 474(c)(7), substituted “subsection (b)(1)” for “subsection (c)(1)” in provisions following subpar. (B).

    Enacted provision · exact public law section
    (7) by striking out “subsection (c)(1)” in subsection (e)(5) (as redesignated by paragraph (1)) and inserting in lieu thereof “subsection (b)(1)”.

21. 1984

    Tax Reform Act of 1984

    Pub. L. 98–369 § 423(c)(4) · 98 Stat. 494

    1. Amended · 26 U.S.C. § 21(e)(5)

       Pub. L. 98–369, § 423(c)(4), amended par. (5) generally

    2. Substituted · 26 U.S.C. § 21(e)(5)

       Pub. L. 98–369, § 423(c)(4), substituting subpars. (A) and (B) reading:

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 98–369, § 423(c)(4), amended par. (5) generally, substituting subpars. (A) and (B) reading:

    “(A) paragraph (2) or (4) of section 152(e) applies to any child with respect to any calendar year, and “(B) such child is under the age of 15 or is physically or mentally incapable of caring for himself,” for former provisions: “(A) a child (as defined in section 151(e)(3)) who is under the age of 15 or who is physically or mentally incapable of caring for himself receives over half of his support during the calendar year from his parents who are divorced or legally separated under a decree of divorce or separate maintenance or who are separated under a written separation agreement, and “(B) such child is in the custody of one or both of his parents for more than one-half of the calendar year.” and substituted in concluding text “(whichever is appropriate) with respect to the custodial parent (within the meaning of section 152(e)(1)), and shall not be treated as a qualifying individual with respect to the noncustodial parent” for “, as the case may be, with respect to that parent who has custody for a longer period during such calendar year than the other parent, and shall not be treated as being a qualifying individual with respect to such other parent.”

    Enacted provision · exact public law section
    (4) Paragraph (5) of section 44A(f) (relating to special dependency 26 USC 44A. Post, p. 826. test in case of divorced parents, etc.) is amended to read as follows: “(5) Special dependency test in case of divorced parents, etc.— If— “(A) paragraph (2) or (4) of section 152(e) applies to any Ante, p. 799. child with respect to any calendar year, and “(B) such child is under the age of 15 or is physically or mentally incapable of caring for himself, in the case of any taxable year beginning in such calendar year, such child shall be treated as a qualifying individual described in subparagraph (A) or (B) of subsection (c)(1) (whichever is appropriate) with respect to the custodial parent (within the meaning of section 152(e)(1), and shall not be treated as a qualifying individual with respect to the noncustodial parent.”

22. 1984

    Tax Reform Act of 1984

    Pub. L. 98–369 § 474(c)(1) · 98 Stat. 494

    Redesignated · 26 U.S.C. § 21(f); 26 U.S.C. § 21(g)

    Pub. L. 98–369, § 474(c)(1), redesignated subsecs. (f) and (g) as (e) and (f), respectively

    Source evidence

    Code amendment note
    Subsecs. (f), (g). Pub. L. 98–369, § 474(c)(1), redesignated subsecs. (f) and (g) as (e) and (f), respectively.

    Enacted provision · exact public law section
    (1) by striking out subsection (b) and by redesignating subsections (c), (d), (e), (f), and (g) as subsections (b), (c), (d), (e), and (f), respectively,

23. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 104(b)(1)(A) · 100 Stat. 2085

    Substituted · 26 U.S.C. § 21(b)(1)(A); 26 U.S.C. § 21(e)(6)(A)

    Pub. L. 99–514, § 104(b)(1)(A), substituted “section 151(c)” for “section 151(e)”

    Source evidence

    Code amendment note
    Subsecs. (b)(1)(A), (e)(6)(A). Pub. L. 99–514, § 104(b)(1)(A), substituted “section 151(c)” for “section 151(e)”.

    Enacted provision · exact public law section
    (A) Sections 21(b)(1)(A), 21(e)(6)(A), and 129(c)(1) are each amended by striking out “section 151(e)” and inserting in lieu thereof “section 151(c)”.

24. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 104(b)(1)(B) · 100 Stat. 2085

    Substituted · 26 U.S.C. § 21(e)(6)(B)

    Pub. L. 99–514, § 104(b)(1)(B), substituted “section 151(c)(3)” for “section 151(e)(3)”

    Source evidence

    Code amendment note
    Subsec. (e)(6)(B). Pub. L. 99–514, § 104(b)(1)(B), substituted “section 151(c)(3)” for “section 151(e)(3)”.

    Enacted provision · exact public law section
    (B) Sections 21(e)(6)(B), 32(c)(1)(A)(i), 129(c)(2), and 152(e)(1)(A) are each amended by striking out “section 151(e)(3)” and inserting in lieu thereof “section 151(c)(3)”.

25. 1987

    Pub. L. 100–203 title X § 10101(a) · 101 Stat. 1330

    Inserted · 26 U.S.C. § 21(b)(2)(A)

    Pub. L. 100–203 inserted at end “Such term shall not include any amount paid for services outside the taxpayer’s household at a camp where the qualifying individual stays overnight.”

    Source evidence

    Code amendment note
    Subsec. (b)(2)(A). Pub. L. 100–203 inserted at end “Such term shall not include any amount paid for services outside the taxpayer’s household at a camp where the qualifying individual stays overnight.”

    Enacted provision · exact public law section
    (a) General Rule.— Subparagraph (A) of section 21(b)(2) (defining employment-related expenses) is amended by adding at the end thereof the following new sentence: “Such term shall not include any amount paid for services outside the taxpayer’s household at a camp where the qualifying individual stays overnight.”

26. 1988

    Family Support Act of 1988

    Pub. L. 100–485 § 703(a) · 102 Stat. 2343

    Substituted · 26 U.S.C. § 21(b)(1)(A)

    Pub. L. 100–485, § 703(a), substituted “age of 13” for “age of 15”

    Source evidence

    Code amendment note
    Subsec. (b)(1)(A). Pub. L. 100–485, § 703(a), substituted “age of 13” for “age of 15”.

    Enacted provision · exact public law section
    (a) Reduction in Maximum Age of Nonhandicapped Qualifying Individual.— Subsections (b)(1)(A) and (e)(5)(B) of section 21 of the Internal Revenue Code of 1986 are each amended by striking “age of 15” and inserting “age of 13”.

27. 1988

    Family Support Act of 1988

    Pub. L. 100–485 § 703(b) · 102 Stat. 2343

    Inserted · 26 U.S.C. § 21(c)

    Pub. L. 100–485, § 703(b), inserted at end: “The amount determined under paragraph (1) or (2) (whichever is applicable) shall be reduced by the aggregate amount excludable from gross income under section 129 for the taxable year.”

    Source evidence

    Code amendment note
    Subsec. (c). Pub. L. 100–485, § 703(b), inserted at end: “The amount determined under paragraph (1) or (2) (whichever is applicable) shall be reduced by the aggregate amount excludable from gross income under section 129 for the taxable year.”

    Enacted provision · exact public law section
    (b) Limitation on Credit Reduced by Amount of Exclusion.— Subsection (c) of section 21 of such Code is amended by adding at the end thereof the following new sentence: “The amount determined under paragraph (1) or (2) (whichever is applicable) shall be reduced by the aggregate amount excludable from gross income under section 129 for the taxable year.”

28. 1988

    Family Support Act of 1988

    Pub. L. 100–485 § 703(a) · 102 Stat. 2343

    Substituted · 26 U.S.C. § 21(e)(5)(B)

    Pub. L. 100–485, § 703(a), substituted “age of 13” for “age of 15”

    Source evidence

    Code amendment note
    Subsec. (e)(5)(B). Pub. L. 100–485, § 703(a), substituted “age of 13” for “age of 15”.

    Enacted provision · exact public law section
    (a) Reduction in Maximum Age of Nonhandicapped Qualifying Individual.— Subsections (b)(1)(A) and (e)(5)(B) of section 21 of the Internal Revenue Code of 1986 are each amended by striking “age of 15” and inserting “age of 13”.

29. 1988

    Family Support Act of 1988

    Pub. L. 100–485 § 703(c)(1) · 102 Stat. 2343

    Added · 26 U.S.C. § 21(e)(9)

    Pub. L. 100–485, § 703(c)(1), added par. (9)

    Source evidence

    Code amendment note
    Subsec. (e)(9). Pub. L. 100–485, § 703(c)(1), added par. (9).

    Enacted provision · exact public law section
    (1) Credit.— Subsection (e) of section 21 of such Code is amended by adding at the end thereof the following new paragraph: “(9) Identifying information required with respect to service provider.— No credit shall be allowed under subsection (a) for any amount paid to any person unless— “(A) the name, address, and taxpayer identification number of such person are included on the return claiming the credit, or “(B) if such person is an organization described in section 501(c)(3) and exempt from tax under section 501(a), the name and address of such person are included on the return claiming the credit. In the case of a failure to provide the information required under the preceding sentence, the preceding sentence shall not apply if it is shown that the taxpayer exercised due diligence in attempting to provide the information so required.”

30. 1996

    Small Business Job Protection Act of 1996

    Pub. L. 104–188 title I § 1615(b) · 110 Stat. 1755

    Added · 26 U.S.C. § 21(e)(10)

    Pub. L. 104–188 added par. (10)

    Source evidence

    Code amendment note
    Subsec. (e)(10). Pub. L. 104–188 added par. (10).

    Enacted provision · exact public law section
    (b) Dependent Care Credit.— Subsection (e) of section 21 (relating to expenses for household and dependent care services necessary for gainful employment) is amended by adding at the end the following new paragraph: “(10) Identifying information required with respect to qualifying individuals.— No credit shall be allowed under this section with respect to any qualifying individual unless the TIN of such individual is included on the return claiming the credit.”.

31. 2001

    Pub. L. 107–16 § 204(b) · 115 Stat. 38

    1. Substituted · 26 U.S.C. § 21(a)(2)

       Pub. L. 107–16, § 204(b), substituted “35 percent” for “30 percent”

    2. Substituted · 26 U.S.C. § 21(a)(2)

       Pub. L. 107–16, § 204(b), substituted “$15,000” for “$10,000”

    Source evidence

    Code amendment note
    Subsec. (a)(2). Pub. L. 107–16, § 204(b), substituted “35 percent” for “30 percent” and “$15,000” for “$10,000”.

    Enacted provision · exact public law section
    (b) Increase in Applicable Percentage.— Section 21(a)(2) (defining applicable percentage) is amended— (1) by striking “30 percent” and inserting “35 percent”, and (2) by striking “$10,000” and inserting “$15,000”.

32. 2001

    Pub. L. 107–16 § 204(a)(1) · 115 Stat. 38

    Substituted · 26 U.S.C. § 21(c)(1)

    Pub. L. 107–16, § 204(a)(1), substituted “$3,000” for “$2,400”

    Source evidence

    Code amendment note
    Subsec. (c)(1). Pub. L. 107–16, § 204(a)(1), substituted “$3,000” for “$2,400”.

    Enacted provision · exact public law section
    (1) by striking “$2,400” in paragraph (1) and inserting “$3,000”, and

33. 2001

    Pub. L. 107–16 § 204(a)(2) · 115 Stat. 38

    Substituted · 26 U.S.C. § 21(c)(2)

    Pub. L. 107–16, § 204(a)(2), substituted “$6,000” for “$4,800”

    Source evidence

    Code amendment note
    Subsec. (c)(2). Pub. L. 107–16, § 204(a)(2), substituted “$6,000” for “$4,800”.

    Enacted provision · exact public law section
    (2) by striking “$4,800” in paragraph (2) and inserting “$6,000”.

34. 2002

    Job Creation and Worker Assistance Act of 2002

    Pub. L. 107–147 § 418(b)(1) · 116 Stat. 21

    Substituted · 26 U.S.C. § 21(d)(2)(A)

    Pub. L. 107–147, § 418(b)(1), substituted “$250” for “$200”

    Source evidence

    Code amendment note
    Subsec. (d)(2)(A). Pub. L. 107–147, § 418(b)(1), substituted “$250” for “$200”.

    Enacted provision · exact public law section
    (1) in subparagraph (A) by striking “$200” and inserting “$250”, and

35. 2002

    Job Creation and Worker Assistance Act of 2002

    Pub. L. 107–147 § 418(b)(2) · 116 Stat. 21

    Substituted · 26 U.S.C. § 21(d)(2)(B)

    Pub. L. 107–147, § 418(b)(2), substituted “$500” for “$400”

    Source evidence

    Code amendment note
    Subsec. (d)(2)(B). Pub. L. 107–147, § 418(b)(2), substituted “$500” for “$400”.

    Enacted provision · exact public law section
    (2) in subparagraph (B) by striking “$400” and inserting “$500”.

36. 2004

    Working Families Tax Relief Act of 2004

    Pub. L. 108–311 § 203(a) · 118 Stat. 1166

    Substituted · 26 U.S.C. § 21(a)(1)

    Pub. L. 108–311, § 203(a), substituted “In the case of an individual for which there are 1 or more qualifying individuals (as defined in subsection (b)(1)) with respect to such individual” for “In the case of an individual who maintains a household which includes as a member one or more qualifying individuals (as defined in subsection (b)(1))”

    Source evidence

    Code amendment note
    Subsec. (a)(1). Pub. L. 108–311, § 203(a), substituted “In the case of an individual for which there are 1 or more qualifying individuals (as defined in subsection (b)(1)) with respect to such individual” for “In the case of an individual who maintains a household which includes as a member one or more qualifying individuals (as defined in subsection (b)(1))”.

    Enacted provision · exact public law section
    (a) In General.— Section 21(a)(1) is amended by striking “In the case of an individual who maintains a household which includes as a member one or more qualifying individuals (as defined in subsection (b)(1))” and inserting “In the case of an individual for which there are 1 or more qualifying individuals (as defined in subsection (b)(1)) with respect to such individual”.

37. 2004

    Working Families Tax Relief Act of 2004

    Pub. L. 108–311 § 203(b) · 118 Stat. 1166

    Amended · 26 U.S.C. § 21(b)(1)

    Pub. L. 108–311, § 203(b), reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The term ‘qualifying individual’ means—

    Source evidence

    Code amendment note
    Subsec. (b)(1). Pub. L. 108–311, § 203(b), reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The term ‘qualifying individual’ means—

    “(A) a dependent of the taxpayer who is under the age of 13 and with respect to whom the taxpayer is entitled to a deduction under section 151(c), “(B) a dependent of the taxpayer who 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.”

    Enacted provision · exact public law section
    (b) Qualifying Individual.— Paragraph (1) of section 21(b) is amended to read as follows: “(1) Qualifying individual.— The term ‘qualifying individual’ means— “(A) a dependent of the taxpayer (as defined in section 152(a)(1)) who has not attained age 13, “(B) a dependent of the taxpayer who is physically or mentally incapable of caring for himself or herself and who has the same principal place of abode as the taxpayer for more than one-half of such taxable year, or “(C) the spouse of the taxpayer, if the spouse is physically or mentally incapable of caring for himself or herself and who has the same principal place of abode as the taxpayer for more than one-half of such taxable year.” .

38. 2004

    Working Families Tax Relief Act of 2004

    Pub. L. 108–311 § 203(c) · 118 Stat. 1166

    Amended · 26 U.S.C. § 21(e)(1)

    Pub. L. 108–311, § 203(c), amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “An individual shall be treated as maintaining a household for any period only if over half the cost of maintaining the household for such period is furnished by such individual (or, if such individual is married during such period, is furnished by such individual and his spouse).”

    Source evidence

    Code amendment note
    Subsec. (e)(1). Pub. L. 108–311, § 203(c), amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “An individual shall be treated as maintaining a household for any period only if over half the cost of maintaining the household for such period is furnished by such individual (or, if such individual is married during such period, is furnished by such individual and his spouse).”

    Enacted provision · exact public law section
    (c) Conforming Amendment.— Paragraph (1) of section 21(e) is amended to read as follows: “(1) Place of abode.— An individual shall not be treated as having the same principal place of abode of the taxpayer if at any time during the taxable year of the taxpayer the relationship between the individual and the taxpayer is in violation of local law.” .

39. 2004

    Working Families Tax Relief Act of 2004

    Pub. L. 108–311 § 207(2) · 118 Stat. 1166

    1. Struck · 26 U.S.C. § 21(e)(5)

       Pub. L. 108–311, § 207(2), struck out “paragraph (2) or (4) of” before “section 152(e)” in subpar. (A)

    2. Substituted · 26 U.S.C. § 21(e)(5)

       Pub. L. 108–311, § 207(2), substituted “as defined in section 152(e)(3)(A)” for “within the meaning of section 152(e)(1)” in concluding provisions

    Source evidence

    Code amendment note
    Subsec. (e)(5). Pub. L. 108–311, § 207(2), struck out “paragraph (2) or (4) of” before “section 152(e)” in subpar. (A) and substituted “as defined in section 152(e)(3)(A)” for “within the meaning of section 152(e)(1)” in concluding provisions.

    Enacted provision · exact public law section
    (2) Section 21(e)(5) is amended— (A) by striking “paragraph (2) or (4) of” in subparagraph (A), and (B) by striking “within the meaning of section 152(e)(1)” and inserting “as defined in section 152(e)(3)(A)”.

40. 2004

    Working Families Tax Relief Act of 2004

    Pub. L. 108–311 § 207(3) · 118 Stat. 1166

    Substituted · 26 U.S.C. § 21(e)(6)(B)

    Pub. L. 108–311, § 207(3), substituted “section 152(f)(1)” for “section 151(c)(3)”

    Source evidence

    Code amendment note
    Subsec. (e)(6)(B). Pub. L. 108–311, § 207(3), substituted “section 152(f)(1)” for “section 151(c)(3)”.

    Enacted provision · exact public law section
    (3) Section 21(e)(6)(B) is amended by striking “section 151(c)(3)” and inserting “section 152(f)(1)”.

41. 2005

    Tax Technical Corrections Act of 2005

    Pub. L. 109–135 title IV § 404(b) · 119 Stat. 2577

    Inserted · 26 U.S.C. § 21(b)(1)(B)

    Pub. L. 109–135 inserted “(as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B))” after “dependent of the taxpayer”

    Source evidence

    Code amendment note
    Subsec. (b)(1)(B). Pub. L. 109–135 inserted “(as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B))” after “dependent of the taxpayer”.

    Enacted provision · exact public law section
    (b) Amendment Related to Section 203 of the Act.— Subparagraph (B) of section 21(b)(1) is 26 USC 21. amended by inserting “(as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B))” after “dependent of the taxpayer”.

42. 2007

    Tax Technical Corrections Act of 2007

    Pub. L. 110–172 § 11(a)(1) · 121 Stat. 2473

    Substituted · 26 U.S.C. § 21(e)(5)

    Pub. L. 110–172 substituted “section 152(e)(4)(A)” for “section 152(e)(3)(A)” in concluding provisions

    Source evidence

    Code amendment note
    Subsec. (e)(5). Pub. L. 110–172 substituted “section 152(e)(4)(A)” for “section 152(e)(3)(A)” in concluding provisions.

    Enacted provision · exact public law section
    (1) Paragraph (5) of section 21(e) is amended by striking “section 152(e)(3)(A)” in the flush matter after subparagraph (B) and inserting “section 152(e)(4)(A)”.

43. 2021

    American Rescue Plan Act of 2021

    Pub. L. 117–2 § 9631(a) · 135 Stat. 4

    Added · 26 U.S.C. § 21(g)

    Pub. L. 117–2, § 9631(a), added subsec. (g)

    Source evidence

    Code amendment note
    Subsec. (g). Pub. L. 117–2, § 9631(a), added subsec. (g).

    Enacted provision · exact public law section
    (a) In General.— Section 21 of the Internal Revenue Code of 1986 26 USC 21. is amended by adding at the end the following new subsection: “(g) Special Rules for 2021.— In the case of any taxable year beginning after December 31, 2020, and before January 1, 2022— “(1) Credit made refundable.— If the taxpayer (in the case of a joint return, either spouse) has a principal place of abode in the United States (determined as provided in section 32) for more than one-half of the taxable year, the credit allowed under subsection (a) shall be treated as a credit allowed under subpart C (and not allowed under this subpart). “(2) Increase in dollar limit on amount creditable.— Subsection (c) shall be applied— “(A) by substituting ‘$8,000’ for ‘$3,000’ in paragraph (1) thereof, and “(B) by substituting ‘$16,000’ for ‘$6,000’ in paragraph (2) thereof. “(3) Increase in applicable percentage.— Subsection (a)(2) shall be applied— “(A) by substituting ‘50 percent’ for ‘35 percent’, and “(B) by substituting ‘$125,000’ for ‘$15,000’. “(4) Application of phaseout to high income individuals.— “(A) In general.— Subsection (a)(2) shall be applied by substituting ‘the phaseout percentage’ for ‘20 percent’. “(B) Phaseout percentage.— The term ‘phaseout percentage’ means 20 percent reduced (but not below zero) by 1 percentage point for each $2,000 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year exceeds $400,000.” .

44. 2021

    American Rescue Plan Act of 2021

    Pub. L. 117–2 § 9631(b) · 135 Stat. 4

    Added · 26 U.S.C. § 21(h)

    Pub. L. 117–2, § 9631(b), added subsec. (h)

    Source evidence

    Code amendment note
    Subsec. (h). Pub. L. 117–2, § 9631(b), added subsec. (h).

    Enacted provision · exact public law section
    (b) Application of Credit in Possessions.— Section 21 of such Code, as amended by subsection (a), is amended by adding at the end the following new subsection: “(h) Application of Credit in Possessions.— “(1) Payment to possessions with mirror code tax systems.— The Secretary shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the application of this section (determined without regard to this subsection) with respect to taxable years beginning in or with 2021. Such amounts shall be determined by the Secretary based on information provided by the government of the respective possession. “(2) Payments to other possessions.— The Secretary shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of this section with respect to taxable years beginning in or with 2021 if a mirror code tax system had been in effect in such possession. Plan. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary, under which such possession will promptly distribute such payments to its residents. “(3) Coordination with credit allowed against united states income taxes.— In the case of any taxable year beginning in or with 2021, no credit shall be allowed under this section to any individual— “(A) to whom a credit is allowable against taxes imposed by a possession with a mirror code tax system by reason of this section, or “(B) who is eligible for a payment under a plan described in paragraph (2). “(4) Mirror code tax system.— For purposes of this subsection, the term ‘mirror code tax system’ means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States. “(5) Treatment of payments.— For purposes of section 1324 of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.” .

45. 2025

    Pub. L. 119–21 title VII § 70405(a) · 139 Stat. 214

    Amended · 26 U.S.C. § 21(a)(2)

    Pub. L. 119–21 amended par. (2) generally. Prior to amendment, text read as follows: “For purposes of paragraph (1), the term ‘applicable percentage’ means 35 percent reduced (but not below 20 percent) by 1 percentage point for each $2,000 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year exceeds $15,000.”

    Unresolved: Pub. L. 119–21 was not found in the local Statutes at Large index.

    Source evidence

    Code amendment note
    Subsec. (a)(2). Pub. L. 119–21 amended par. (2) generally. Prior to amendment, text read as follows: “For purposes of paragraph (1), the term ‘applicable percentage’ means 35 percent reduced (but not below 20 percent) by 1 percentage point for each $2,000 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year exceeds $15,000.”

    Effective date note
    Pub. L. 119–21, title VII, § 70405(b), July 4, 2025, 139 Stat. 215, provided that: “The amendment made by this section [amending this section] shall apply to taxable years beginning after December 31, 2025.”

51 of 52 references resolved to an enrolled provision · 1 unresolved