{"identifier":"/us/usc/t26/s21","title":26,"num":"\u00a7\u202f21.","heading":"Expenses for household and dependent care services necessary for gainful employment","text":"\u00a7\u202f21.\nExpenses for household and dependent care services necessary for gainful employment\n(a)\nAllowance of credit\n(1)\nIn general\nIn 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, 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 (b)(2)) paid by such individual during the taxable year.\n(2)\nApplicable percentage defined\nFor purposes of paragraph (1), the term \u201capplicable percentage\u201d means 50 percent\u2014\n(A) reduced (but not below 35 percent) by 1 percentage point for each $2,000 or fraction thereof by which the taxpayer\u2019s adjusted gross income for the taxable year exceeds $15,000, and\n(B) further reduced (but not below 20 percent) by 1 percentage point for each $2,000 ($4,000 in the case of a joint return) or fraction thereof by which the taxpayer\u2019s adjusted gross income for the taxable year exceeds $75,000 ($150,000 in the case of a joint return).\n(b)\nDefinitions of qualifying individual and employment-related expenses\nFor purposes of this section\u2014\n(1)\nQualifying individual\nThe term \u201cqualifying individual\u201d means\u2014\n(A) a dependent of the taxpayer (as defined in section 152(a)(1)) who has not attained age 13,\n(B) a dependent of the taxpayer (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B)) 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\n(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.\n(2)\nEmployment-related expenses\n(A)\nIn general\nThe term \u201cemployment-related expenses\u201d 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:\n(i) expenses for household services, and\n(ii) expenses for the care of a qualifying individual.\nSuch term shall not include any amount paid for services outside the taxpayer\u2019s household at a camp where the qualifying individual stays overnight.\n(B)\nException\nEmployment-related expenses described in subparagraph (A) which are incurred for services outside the taxpayer\u2019s household shall be taken into account only if incurred for the care of\u2014\n(i) a qualifying individual described in paragraph (1)(A), or\n(ii) a qualifying individual (not described in paragraph (1)(A)) who regularly spends at least 8 hours each day in the taxpayer\u2019s household.\n(C)\nDependent care centers\nEmployment-related expenses described in subparagraph (A) which are incurred for services provided outside the taxpayer\u2019s household by a dependent care center (as defined in subparagraph (D)) shall be taken into account only if\u2014\n(i) such center complies with all applicable laws and regulations of a State or unit of local government, and\n(ii) the requirements of subparagraph (B) are met.\n(D)\nDependent care center defined\nFor purposes of this paragraph, the term \u201cdependent care center\u201d means any facility which\u2014\n(i) provides care for more than six individuals (other than individuals who reside at the facility), and\n(ii) receives a fee, payment, or grant for providing services for any of the individuals (regardless of whether such facility is operated for profit).\n(c)\nDollar limit on amount creditable\nThe amount of the employment-related expenses incurred during any taxable year which may be taken into account under subsection (a) shall not exceed\u2014\n(1) $3,000 if there is 1 qualifying individual with respect to the taxpayer for such taxable year, or\n(2) $6,000 if there are 2 or more qualifying individuals with respect to the taxpayer for such taxable year.\nThe 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.\n(d)\nEarned income limitation\n(1)\nIn general\nExcept 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\u2014\n(A) in the case of an individual who is not married at the close of such year, such individual\u2019s earned income for such year, or\n(B) in the case of an individual who is married at the close of such year, the lesser of such individual\u2019s earned income or the earned income of his spouse for such year.\n(2)\nSpecial rule for spouse who is a student or incapable of caring for himself\nIn the case of a spouse who is a student or a qualifying individual described in subsection (b)(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\u2014\n(A) $250 if subsection (c)(1) applies for the taxable year, or\n(B) $500 if subsection (c)(2) applies for the taxable year.\nIn the case of any husband and wife, this paragraph shall apply with respect to only one spouse for any one month.\n(e)\nSpecial rules\nFor purposes of this section\u2014\n(1)\nPlace of abode\nAn 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.\n(2)\nMarried couples must file joint return\nIf the taxpayer is married at the close of the taxable year, the credit shall be allowed under subsection (a) only if the taxpayer and his spouse file a joint return for the taxable year.\n(3)\nMarital status\nAn individual legally separated from his spouse under a decree of divorce or of separate maintenance shall not be considered as married.\n(4)\nCertain married individuals living apart\nIf\u2014\n(A) an individual who is married and who files a separate return\u2014\n(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\n(ii) furnishes over half of the cost of maintaining such household during the taxable year, and\n(B) during the last 6 months of such taxable year such individual\u2019s spouse is not a member of such household,\nsuch individual shall not be considered as married.\n(5)\nSpecial dependency test in case of divorced parents, etc.\nIf\u2014\n(A) section 152(e) applies to any child with respect to any calendar year, and\n(B) such child is under the age of 13 or is physically or mentally incapable of caring for himself,\nin 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 (b)(1) (whichever is appropriate) with respect to the custodial parent (as defined in section 152(e)(4)(A)), and shall not be treated as a qualifying individual with respect to the noncustodial parent.\n(6)\nPayments to related individuals\nNo credit shall be allowed under subsection (a) for any amount paid by the taxpayer to an individual\u2014\n(A) with respect to whom, for the taxable year, a deduction under section 151(c) (relating to deduction for personal exemptions for dependents) is allowable either to the taxpayer or his spouse, or\n(B) who is a child of the taxpayer (within the meaning of section 152(f)(1)) who has not attained the age of 19 at the close of the taxable year.\nFor purposes of this paragraph, the term \u201ctaxable year\u201d means the taxable year of the taxpayer in which the service is performed.\n(7)\nStudent\nThe term \u201cstudent\u201d means an individual who during each of 5 calendar months during the taxable year is a full-time student at an educational organization.\n(8)\nEducational organization\nThe term \u201ceducational organization\u201d means an educational organization described in section 170(b)(1)(A)(ii).\n(9)\nIdentifying information required with respect to service provider\nNo credit shall be allowed under subsection (a) for any amount paid to any person unless\u2014\n(A) the name, address, and taxpayer identification number of such person are included on the return claiming the credit, or\n(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.\nIn 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.\n(10)\nIdentifying information required with respect to qualifying individuals\nNo 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.\n(f)\nRegulations\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section.\n(g)\nSpecial rules for 2021\nIn the case of any taxable year beginning after\n(1)\nCredit made refundable\nIf 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).\n(2)\nIncrease in dollar limit on amount creditable\nSubsection (c) shall be applied\u2014\n(A) by substituting \u201c$8,000\u201d for \u201c$3,000\u201d in paragraph (1) thereof, and\n(B) by substituting \u201c$16,000\u201d for \u201c$6,000\u201d in paragraph (2) thereof.\n(3)\nIncrease in applicable percentage\nSubsection (a)(2) shall be applied\u2014\n(A) by substituting \u201c50 percent\u201d for \u201c35 percent\u201d, and\n(B) by substituting \u201c$125,000\u201d for \u201c$15,000\u201d.\n(4)\nApplication of phaseout to high income individuals\n(A)\nIn general\nSubsection (a)(2) shall be applied by substituting \u201cthe phaseout percentage\u201d for \u201c20 percent\u201d.\n(B)\nPhaseout percentage\nThe term \u201cphaseout percentage\u201d means 20 percent reduced (but not below zero) by 1 percentage point for each $2,000 (or fraction thereof) by which the taxpayer\u2019s adjusted gross income for the taxable year exceeds $400,000.\n(h)\nApplication of credit in possessions\n(1)\nPayment to possessions with mirror code tax systems\nThe 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.\n(2)\nPayments to other possessions\nThe 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. 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.\n(3)\nCoordination with credit allowed against United States income taxes\nIn the case of any taxable year beginning in or with 2021, no credit shall be allowed under this section to any individual\u2014\n(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\n(B) who is eligible for a payment under a plan described in paragraph (2).\n(4)\nMirror code tax system\nFor purposes of this subsection, the term \u201cmirror code tax system\u201d 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.\n(5)\nTreatment of payments\nFor purposes of\nsection 1324 of title 31","url":"https://projectusc.org/usc/t26/s21.html","content":[{"t":"sec","id":"/us/usc/t26/s21","children":[{"t":"num","text":"\u00a7\u202f21."},{"t":"heading","text":"Expenses for household and dependent care services necessary for gainful employment"},{"t":"subsec","id":"/us/usc/t26/s21/a","children":[{"t":"num","text":"(a)"},{"t":"heading","text":"Allowance of credit"},{"t":"para","id":"/us/usc/t26/s21/a/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"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, 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 (b)(2)) paid by such individual during the taxable year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/a/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Applicable percentage defined"},{"t":"chapeau","text":"For purposes of paragraph (1), the term \u201capplicable percentage\u201d means 50 percent\u2014"},{"t":"subpara","id":"/us/usc/t26/s21/a/2/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" reduced (but not below 35 percent) by 1 percentage point for each $2,000 or fraction thereof by which the taxpayer\u2019s adjusted gross income for the taxable year exceeds $15,000, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s21/a/2/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" further reduced (but not below 20 percent) by 1 percentage point for each $2,000 ($4,000 in the case of a joint return) or fraction thereof by which the taxpayer\u2019s adjusted gross income for the taxable year exceeds $75,000 ($150,000 in the case of a joint return).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s21/b","children":[{"t":"num","text":"(b)"},{"t":"heading","text":"Definitions of qualifying individual and employment-related expenses"},{"t":"chapeau","text":"For purposes of this section\u2014"},{"t":"para","id":"/us/usc/t26/s21/b/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Qualifying individual"},{"t":"chapeau","text":"The term \u201cqualifying individual\u201d means\u2014"},{"t":"subpara","id":"/us/usc/t26/s21/b/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" a dependent of the taxpayer (as defined in section 152(a)(1)) who has not attained age 13,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s21/b/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" a dependent of the taxpayer (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B)) 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","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s21/b/1/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" 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.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/b/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Employment-related expenses"},{"t":"subpara","id":"/us/usc/t26/s21/b/2/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The term \u201cemployment-related expenses\u201d 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:"},{"t":"clause","id":"/us/usc/t26/s21/b/2/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" expenses for household services, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s21/b/2/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" expenses for the care of a qualifying individual.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"Such term shall not include any amount paid for services outside the taxpayer\u2019s household at a camp where the qualifying individual stays overnight.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s21/b/2/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Exception"},{"t":"chapeau","text":"Employment-related expenses described in subparagraph (A) which are incurred for services outside the taxpayer\u2019s household shall be taken into account only if incurred for the care of\u2014"},{"t":"clause","id":"/us/usc/t26/s21/b/2/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" a qualifying individual described in paragraph (1)(A), or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s21/b/2/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" a qualifying individual (not described in paragraph (1)(A)) who regularly spends at least 8 hours each day in the taxpayer\u2019s household.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s21/b/2/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Dependent care centers"},{"t":"chapeau","text":"Employment-related expenses described in subparagraph (A) which are incurred for services provided outside the taxpayer\u2019s household by a dependent care center (as defined in subparagraph (D)) shall be taken into account only if\u2014"},{"t":"clause","id":"/us/usc/t26/s21/b/2/C/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" such center complies with all applicable laws and regulations of a State or unit of local government, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s21/b/2/C/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the requirements of subparagraph (B) are met.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s21/b/2/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"Dependent care center defined"},{"t":"chapeau","text":"For purposes of this paragraph, the term \u201cdependent care center\u201d means any facility which\u2014"},{"t":"clause","id":"/us/usc/t26/s21/b/2/D/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" provides care for more than six individuals (other than individuals who reside at the facility), and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s21/b/2/D/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" receives a fee, payment, or grant for providing services for any of the individuals (regardless of whether such facility is operated for profit).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s21/c","children":[{"t":"num","text":"(c)"},{"t":"heading","text":"Dollar limit on amount creditable"},{"t":"chapeau","text":"The amount of the employment-related expenses incurred during any taxable year which may be taken into account under subsection (a) shall not exceed\u2014"},{"t":"para","id":"/us/usc/t26/s21/c/1","children":[{"t":"num","text":"(1)"},{"t":"content","text":" $3,000 if there is 1 qualifying individual with respect to the taxpayer for such taxable year, or","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/c/2","children":[{"t":"num","text":"(2)"},{"t":"content","text":" $6,000 if there are 2 or more qualifying individuals with respect to the taxpayer for such taxable year.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"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.","tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s21/d","children":[{"t":"num","text":"(d)"},{"t":"heading","text":"Earned income limitation"},{"t":"para","id":"/us/usc/t26/s21/d/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"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\u2014"},{"t":"subpara","id":"/us/usc/t26/s21/d/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" in the case of an individual who is not married at the close of such year, such individual\u2019s earned income for such year, or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s21/d/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" in the case of an individual who is married at the close of such year, the lesser of such individual\u2019s earned income or the earned income of his spouse for such year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/d/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Special rule for spouse who is a student or incapable of caring for himself"},{"t":"chapeau","text":"In the case of a spouse who is a student or a qualifying individual described in subsection (b)(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\u2014"},{"t":"subpara","id":"/us/usc/t26/s21/d/2/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" $250 if subsection (c)(1) applies for the taxable year, or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s21/d/2/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" $500 if subsection (c)(2) applies for the taxable year.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"In the case of any husband and wife, this paragraph shall apply with respect to only one spouse for any one month.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s21/e","children":[{"t":"num","text":"(e)"},{"t":"heading","text":"Special rules"},{"t":"chapeau","text":"For purposes of this section\u2014"},{"t":"para","id":"/us/usc/t26/s21/e/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Place of abode"},{"t":"content","children":[{"t":"p","text":"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.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/e/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Married couples must file joint return"},{"t":"content","children":[{"t":"p","text":"If the taxpayer is married at the close of the taxable year, the credit shall be allowed under subsection (a) only if the taxpayer and his spouse file a joint return for the taxable year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/e/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Marital status"},{"t":"content","children":[{"t":"p","text":"An individual legally separated from his spouse under a decree of divorce or of separate maintenance shall not be considered as married.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/e/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Certain married individuals living apart"},{"t":"chapeau","text":"If\u2014"},{"t":"subpara","id":"/us/usc/t26/s21/e/4/A","children":[{"t":"num","text":"(A)"},{"t":"chapeau","text":" an individual who is married and who files a separate return\u2014"},{"t":"clause","id":"/us/usc/t26/s21/e/4/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" 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","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s21/e/4/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" furnishes over half of the cost of maintaining such household during the taxable year, and","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s21/e/4/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" during the last 6 months of such taxable year such individual\u2019s spouse is not a member of such household,","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"such individual shall not be considered as married.","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/e/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Special dependency test in case of divorced parents, etc."},{"t":"chapeau","text":"If\u2014"},{"t":"subpara","id":"/us/usc/t26/s21/e/5/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" section 152(e) applies to any child with respect to any calendar year, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s21/e/5/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" such child is under the age of 13 or is physically or mentally incapable of caring for himself,","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"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 (b)(1) (whichever is appropriate) with respect to the custodial parent (as defined in section 152(e)(4)(A)), and shall not be treated as a qualifying individual with respect to the noncustodial parent.","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/e/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Payments to related individuals"},{"t":"chapeau","text":"No credit shall be allowed under subsection (a) for any amount paid by the taxpayer to an individual\u2014"},{"t":"subpara","id":"/us/usc/t26/s21/e/6/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" with respect to whom, for the taxable year, a deduction under section 151(c) (relating to deduction for personal exemptions for dependents) is allowable either to the taxpayer or his spouse, or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s21/e/6/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" who is a child of the taxpayer (within the meaning of section 152(f)(1)) who has not attained the age of 19 at the close of the taxable year.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"For purposes of this paragraph, the term \u201ctaxable year\u201d means the taxable year of the taxpayer in which the service is performed.","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/e/7","children":[{"t":"num","text":"(7)"},{"t":"heading","text":"Student"},{"t":"content","children":[{"t":"p","text":"The term \u201cstudent\u201d means an individual who during each of 5 calendar months during the taxable year is a full-time student at an educational organization.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/e/8","children":[{"t":"num","text":"(8)"},{"t":"heading","text":"Educational organization"},{"t":"content","children":[{"t":"p","text":"The term \u201ceducational organization\u201d means an educational organization described in section 170(b)(1)(A)(ii).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/e/9","children":[{"t":"num","text":"(9)"},{"t":"heading","text":"Identifying information required with respect to service provider"},{"t":"chapeau","text":"No credit shall be allowed under subsection (a) for any amount paid to any person unless\u2014"},{"t":"subpara","id":"/us/usc/t26/s21/e/9/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the name, address, and taxpayer identification number of such person are included on the return claiming the credit, or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s21/e/9/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" 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.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"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.","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/e/10","children":[{"t":"num","text":"(10)"},{"t":"heading","text":"Identifying information required with respect to qualifying individuals"},{"t":"content","children":[{"t":"p","text":"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.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s21/f","children":[{"t":"num","text":"(f)"},{"t":"heading","text":"Regulations"},{"t":"content","children":[{"t":"p","text":"The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s21/g","children":[{"t":"num","text":"(g)"},{"t":"heading","text":"Special rules for 2021"},{"t":"chapeau","text":"In the case of any taxable year beginning after ","children":[{"t":"text","text":"December 31, 2020","tail":", and before "},{"t":"text","text":"January 1, 2022","tail":"\u2014"}]},{"t":"para","id":"/us/usc/t26/s21/g/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Credit made refundable"},{"t":"content","children":[{"t":"p","text":"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).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/g/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Increase in dollar limit on amount creditable"},{"t":"chapeau","text":"Subsection (c) shall be applied\u2014"},{"t":"subpara","id":"/us/usc/t26/s21/g/2/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" by substituting \u201c$8,000\u201d for \u201c$3,000\u201d in paragraph (1) thereof, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s21/g/2/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" by substituting \u201c$16,000\u201d for \u201c$6,000\u201d in paragraph (2) thereof.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/g/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Increase in applicable percentage"},{"t":"chapeau","text":"Subsection (a)(2) shall be applied\u2014"},{"t":"subpara","id":"/us/usc/t26/s21/g/3/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" by substituting \u201c50 percent\u201d for \u201c35 percent\u201d, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s21/g/3/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" by substituting \u201c$125,000\u201d for \u201c$15,000\u201d.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/g/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Application of phaseout to high income individuals"},{"t":"subpara","id":"/us/usc/t26/s21/g/4/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"Subsection (a)(2) shall be applied by substituting \u201cthe phaseout percentage\u201d for \u201c20 percent\u201d.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s21/g/4/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Phaseout percentage"},{"t":"content","children":[{"t":"p","text":"The term \u201cphaseout percentage\u201d means 20 percent reduced (but not below zero) by 1 percentage point for each $2,000 (or fraction thereof) by which the taxpayer\u2019s adjusted gross income for the taxable year exceeds $400,000.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s21/h","children":[{"t":"num","text":"(h)"},{"t":"heading","text":"Application of credit in possessions"},{"t":"para","id":"/us/usc/t26/s21/h/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Payment to possessions with mirror code tax systems"},{"t":"content","children":[{"t":"p","text":"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.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/h/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Payments to other possessions"},{"t":"content","children":[{"t":"p","text":"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. 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.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/h/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Coordination with credit allowed against United States income taxes"},{"t":"chapeau","text":"In the case of any taxable year beginning in or with 2021, no credit shall be allowed under this section to any individual\u2014"},{"t":"subpara","id":"/us/usc/t26/s21/h/3/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" to whom a credit is allowable against taxes imposed by a possession with a mirror code tax system by reason of this section, or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s21/h/3/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" who is eligible for a payment under a plan described in paragraph (2).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/h/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Mirror code tax system"},{"t":"content","children":[{"t":"p","text":"For purposes of this subsection, the term \u201cmirror code tax system\u201d 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.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s21/h/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Treatment of payments"},{"t":"content","children":[{"t":"p","text":"For purposes of ","children":[{"t":"ref","text":"section 1324 of title 31","href":"/us/usc/t31/s1324","tail":", 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."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"}]}]}