,i #aafth ,,congress #ast ,session ,h4 ,r4 #cbc ,,in ,,the ,,house ,,of ,,representatives ,january #h1 #bjai,ms4 ,lee of ,california 7for herself1 ,ms4 ,wasserman ,schultz1 and ,ms4 ,wilson of ,florida7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide a tax credit for expenses for household and elder care services necessary for gainful employment4 #a4 ,expenses for household and elder care services necessary for gainful employment 7a7 ,in general ,subpart ,a of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #be;,e4 ,expenses for household and elder care services necessary for gainful employment 7a7 ,allowance of credit 7#a7 ,in general ,in the case of an individual for which there are one or more qualifying individuals 7as defined in subsection 7b77#a77 with respect to such individual1 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 7as defined in subsection 7b77#b77 paid by such individual during the taxable year4 7#b7 ,applicable percentage defined ,for purposes of paragraph 7#a71 the term applicable percentage means #ce percent reduced 7but not below #bj percent7 by #a percentage point for each #b1jjj 7or fraction thereof7 by which the taxpayer's adjusted gross income for the taxable year exceeds #ae1jjj4 7b7 ,definitions of qualifying individual and employment-,related expenses ,for purposes of this section-- 7#a7 ,qualifying individual ,the term qualifying individual means an individual who-- 7,a7 has attained age #ej1 and 7,b7 is one of the following3 7i7 ,an individual who bears a relationship to the taxpayer described in subparagraph 7,c7 or 7,d7 of section #aeb7;d77#b7 7relating to fathers1 mothers1 and ancestors74 7ii7 ,an individual would be a dependent of the taxpayer 7as defined in section #aeb1 determined without regard to subsections 7b77#a7 and 7b77#b77 as a qualifying relative described in section #aeb7;d77#a7 if-- 7,i7 in lieu of subparagraphs 7,b7 and 7,c7 thereof the following applied with respect to the individual3 7aa7 the taxpayer has provided over one-half of the individual's support for the calendar year in which such taxable year begins and each of the preceding #d taxable years1 and 7bb7 the individual's modified adjusted gross income for the calendar year in which such taxable year begins is less than the exemption amount 7as defined in section #aea7;d771 7,,ii7 the individual is physically or mentally incapable of caring for himself or herself1 and 7,,iii7 the individual who has the same principal place of abode as the taxpayer for more than one-half of such taxable year4 7iii7 ,the spouse of the taxpayer who is physically or mentally incapable of caring for himself or herself4 7#b7 ,modified adjusted gross income ,the term modified adjusted gross income means adjusted gross income determined without regard to section #hf4 7#c7 ,employment-related expenses 7,a7 ,in general ,the term employment-related expenses means amounts paid for the following expenses1 but only if such expenses are incurred to enable the taxpayer to be gainfully employed for any period for which there are one or more qualifying individuals with respect to the taxpayer3 7i7 expenses for household services1 and 7ii7 expenses for the care of a qualifying individual1 including expenses for respite care and hospice care4 7,b7 ,exception ,employment-related expenses described in subparagraph 7,a7 which are incurred for services outside the taxpayer's household shall be taken into account only if incurred for the care of-- 7i7 a qualifying individual described in paragraph 7#a77;,a71 or 7ii7 a qualifying individual 7not described in paragraph 7#a77;,a77 who regularly spends at least #h hours each day in the taxpayer's household4 7,c7 ,dependent care centers ,employment-related expenses described in subparagraph 7,a7 which are incurred for services provided outside the taxpayer's household by a dependent care center 7as defined in subparagraph 7,d77 shall be taken into account only if-- 7i7 such center complies with all applicable laws and regulations of a ,state or unit of local government1 and 7ii7 the requirements of subparagraph 7,b7 are met4 7,d7 ,dependent care center defined ,for purposes of this paragraph1 the term dependent care center means any facility which-- 7i7 provides care for more than six individuals 7other than individuals who reside at the facility71 and 7ii7 receives a fee1 payment1 or grant for providing services for any of the individuals 7regardless of whether such facility is operated for profit74 7c7 ,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 7a7 shall not exceed-- 7#a7 #c1jjj if there is #a qualifying individual with respect to the taxpayer for such taxable year1 or 7#b7 #f1jjj if there are two or more qualifying individuals with respect to the taxpayer for such taxable year4 ,the amount determined under paragraph 7#a7 or 7#b7 7whichever is applicable7 shall be reduced by the aggregate amount excludable from gross income under section #abi for the taxable year4 7d7 ,earned income limitation ,except as otherwise provided in this subsection1 the amount of the employment-related expenses incurred during any taxable year which may be taken into account under subsection 7a7 shall not exceed-- 7#a7 in the case of an individual who is not married at the close of such year1 such individual's earned income for such year1 or 7#b7 in the case of an individual who is married at the close of such year1 the lesser of such individual's earned income or the earned income of his spouse for such year4 7e7 ,special rules ,for purposes of this section-- 7#a7 ,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 law4 7#b7 ,married couples must file joint return ,if the taxpayer is married at the close of the taxable year1 the credit shall be allowed under subsection 7a7 only if the taxpayer and his spouse file a joint return for the taxable year4 7#c7 ,marital status ,an individual legally separated from his spouse under a decree of divorce or of separate maintenance shall not be considered as married4 7#d7 ,certain married individuals living apart ,if-- 7,a7 an individual who is married and who files a separate return-- 7i7 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 individual1 and 7ii7 furnishes over half of the cost of maintaining such household during the taxable year1 and 7,b7 during the last #f months of such taxable year such individual's spouse is not a member of such household1 such individual shall not be considered as married4 7#e7 ,payments to related individuals ,no credit shall be allowed under subsection 7a7 for any amount paid by the taxpayer to an individual-- 7,a7 with respect to whom1 for the taxable year1 a deduction under section #aea7;c7 7relating to deduction for personal exemptions for dependents7 is allowable either to the taxpayer or his spouse1 or 7,b7 who is a child of the taxpayer 7within the meaning of section #aeb7;f77#a77 who has not attained the age of #ai at the close of the taxable year4 ,for purposes of this paragraph1 the term taxable year means the taxable year of the taxpayer in which the service is performed4 7#f7 ,identifying information required with respect to service provider ,no credit shall be allowed under subsection 7a7 for any amount paid to any person unless-- 7,a7 the name1 address1 and taxpayer identification number of such person are included on the return claiming the credit1 or 7,b7 if such person is an organization described in section #eja7;c77#c7 and exempt from tax under section #eja7;a71 the name and address of such person are included on the return claiming the credit4 ,in the case of a failure to provide the information required under the preceding sentence1 the preceding sentence shall not apply if it is shown that the taxpayer exercised due diligence in attempting to provide the information so required4 7#g7 ,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 credit4 7f7 ,regulations ,the ,secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section4 4 7b7 ,clerical amendment ,the table of sections for subpart ,a of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new item3 ,sec4 #be;,e4 ,expenses for household and elder care services necessary for gainful employment4 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4