518
78 Stat. 49.
PUBLIC LAW 92-178-DEC. 10, 1971
[85 STAT.
SEC. 210. CERTAIN EXPENSES TO ENABLE INDIVIDUALS TO BE GAINFULLY EMPLOYED. (a) IN GENERAL.—Section 214 (relating to expenses for care of certain dependents) is amended to read as follows:
"SEC. 214. EXPENSES FOR HOUSEHOLD AND DEPENDENT CARE SERVICES NECESSARY FOR GAINFUL EMPLOYMENT.
Ante, p. 510.
" (a) ALLOWANCE or DEDUCTION.—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)), there shall be allowed as a deduction the employment-related expenses (as defined in subsection (b)(2)) paid by him during the taxable year. "(b) DEFINITIONS, ETC.—For purposes of this section— "(1) QuALiFYixcx INDIVIDUAL.—The term 'qualifying individual' means— " (A) a dependent of the taxpayer who is under the age 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.—The term 'employmentrelated expenses' means amounts paid for the following expenses, but only if such expenses are incurred to enable the taxpayer to be gainfully employed: " (A) expenses for household services, and " (B) expenses for the care of a qualifying individual. "(3) MAINTAINING A HOUSEHOLD.—An individual shall be treated as maintaining a household for any period only if over half of the cost of maintaining the household during such period is furnished by such individual (or if such individual is married during such period, is furnished by such individual and his spouse). "(c)
LIMITATIONS ON AMOUNTS DEDUCTIBLE.—
"(1) IN GENERAL.—A deduction shall be allowed under subsection (a) for employment-related expenses incurred during any month only to the extent such expenses do not exceed $400. "(2)
EXPENSES MUST BE FOR SERVICES IN THE HOUSEHOLD.—
" (A) IN GENERAL.—Except as provided in subparagraph (B), a deduction shall be allowed under subsection (a) for employment-related expenses only if they are incurred for services in the taxpayer's household. " (B) EXCEPTION.—Employment-related expenses described in subsection (b)(2)(B) 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 subsection (b)(1)(A) and onh^ to the extent such expenses incurred during any month do not exceed— " (i) $200, in the case of one such individual, " (ii) $300, in the case of two such individuals, and "(iii) $400, in the case of three or more such individuals. " (d) INCOME LIMITATION.—If the adjusted gross income of the taxpayer exceeds $18,000 for the taxable year during which the expenses are incurred, the amount of the employment-related expenses incurred during any month of such year which may be taken into account under this section shall (after the application of subsections (e)(5) and (c)) be further reduced by that portion of one-half of the excess of the adjusted gross income over $18,000 which is properly allocable to such
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