For purposes of section 38, the employer-provided child care credit determined under this section for the taxable year is an amount equal to the sum of-
of the taxpayer for such taxable year.
The credit allowable under subsection (a) for any taxable year shall not exceed $150,000.
For purposes of this section-
The term "qualified child care expenditure" means any amount paid or incurred-
The term "qualified child care expenditures" shall not include expenses in excess of the fair market value of such care.
The term "qualified child care facility" means a facility-
Clause (i) shall not apply to a facility which is the principal residence (within the meaning of section 121) of the operator of the facility.
A facility shall not be treated as a qualified child care facility with respect to a taxpayer unless-
The term "qualified child care resource and referral expenditure" means any amount paid or incurred under a contract to provide child care resource and referral services to an employee of the taxpayer.
The services shall not be treated as qualified unless the provision of such services (or the eligibility to use such services) does not discriminate in favor of employees of the taxpayer who are highly compensated employees (within the meaning of section 414(q)).
If, as of the close of any taxable year, there is a recapture event with respect to any qualified child care facility of the taxpayer, then the tax of the taxpayer under this chapter for such taxable year shall be increased by an amount equal to the product of-
For purposes of this subsection, the applicable recapture percentage shall be determined from the following table:
If the recapture event occurs in: | The applicable recapture percentage is: |
Years 1-3 | 100 |
Year 4 | 85 |
Year 5 | 70 |
Year 6 | 55 |
Year 7 | 40 |
Year 8 | 25 |
Years 9 and 10 | 10 |
Years 11 and thereafter | 0. |
For purposes of subparagraph (A), year 1 shall begin on the first day of the taxable year in which the qualified child care facility is placed in service by the taxpayer.
For purposes of this subsection, the term "recapture event" means-
The cessation of the operation of the facility as a qualified child care facility.
Except as provided in clause (ii), the disposition of a taxpayer's interest in a qualified child care facility with respect to which the credit described in subsection (a) was allowable.
Clause (i) shall not apply if the person acquiring such interest in the facility agrees in writing to assume the recapture liability of the person disposing of such interest in effect immediately before such disposition. In the event of such an assumption, the person acquiring the interest in the facility shall be treated as the taxpayer for purposes of assessing any recapture liability (computed as if there had been no change in ownership).
The tax for the taxable year shall be increased under paragraph (1) only with respect to credits allowed by reason of this section which were used to reduce tax liability. In the case of credits not so used to reduce tax liability, the carryforwards and carrybacks under section 39 shall be appropriately adjusted.
Any increase in tax under this subsection shall not be treated as a tax imposed by this chapter for purposes of determining the amount of any credit under this chapter or for purposes of section 55.
The increase in tax under this subsection shall not apply to a cessation of operation of the facility as a qualified child care facility by reason of a casualty loss to the extent such loss is restored by reconstruction or replacement within a reasonable period established by the Secretary.
For purposes of this section-
All persons which are treated as a single employer under subsections (a) and (b) of section 52 shall be treated as a single taxpayer.
Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.
In the case of partnerships, the credit shall be allocated among partners under regulations prescribed by the Secretary.
For purposes of this subtitle-
If a credit is determined under this section with respect to any property by reason of expenditures described in subsection (c)(1)(A), the basis of such property shall be reduced by the amount of the credit so determined.
If, during any taxable year, there is a recapture amount determined with respect to any property the basis of which was reduced under subparagraph (A), the basis of such property (immediately before the event resulting in such recapture) shall be increased by an amount equal to such recapture amount. For purposes of the preceding sentence, the term "recapture amount" means any increase in tax (or adjustment in carrybacks or carryovers) determined under subsection (d).
No deduction or credit shall be allowed under any other provision of this chapter with respect to the amount of the credit determined under this section.
26 U.S.C. § 45F
EDITORIAL NOTES
AMENDMENTS2002-Subsec. (d)(4)(B). Pub. L. 107-147 substituted "this chapter or for purposes of section 55" for "subpart A, B, or D of this part".
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2002 AMENDMENT Amendment by Pub. L. 107-147 effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001, Pub. L. 107-16, to which such amendment relates, see section 411(x) of Pub. L. 107-147, set out as a note under section 25B of this title.
EFFECTIVE DATESection applicable to taxable years beginning after Dec. 31, 2001, see section 205(c) of Pub. L. 107-16, set out as an Effective Date of 2001 Amendment note under section 38 of this title.
- Secretary
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- State
- The term "State" shall be construed to include the District of Columbia, where such construction is necessary to carry out provisions of this title.
- person
- The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
- taxable year
- The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of subtitle A or under regulations prescribed by the Secretary, the period for which such return is made.
- taxpayer
- The term "taxpayer" means any person subject to any internal revenue tax.
- trade or business
- The term "trade or business" includes the performance of the functions of a public office.