Page:United States Statutes at Large Volume 95.djvu/224

 95 STAT. 198

PUBLIC LAW 97-34—AUG. 13, 1981 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." (b) INCREASES IN DOLLAR LIMITS ON AMOUNT CREDITABLE.—

26 USC 44A.

(1) IN GENERAL.—Subsection (d) of section 44A (relating to dollar limit on amount creditable) is amended— (A) by striking out "$2,000" and inserting in lieu thereof "$2,400", and (B) by striking out "$4,000" and inserting in lieu thereof "$4,800". (2) CONFORMING AMENDMENTS.—Paragraph (2) of section

44A(e) (relating to earned income limitation) is amended— (A) by striking out "$166" and inserting in lieu thereof "$200", and (B) by striking out "$333" and inserting in lieu thereof "$400". (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 (l)(A),or "(ii) a qualifying individual (not described in paragraph (I)(A)) who regularly spends at least 8 hours each day in the taxpayer's household." (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)." (e) EXCLUSION OF DEPENDENT CARE ASSISTANCE FROM THE INCOME OF EMPLOYEES.—

Post. p. 267.

(1) IN GENERAL.—Part III of subchapter B of chapter 1 (as amended by section 301) is amended by redesignating section 129

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