[3] IRC section 21 serves to lessen this imbalance by allowing a limited credit for certain expenses related to the care of a qualified dependent.
[7] Creditable expenses include not only those incurred for actual physical care of the dependent but also ancillary “household” services like meal preparation and cleaning.
No credit is allowed for expenses incurred to send a dependent to an overnight camp.
[12] The credit amount is equal to the applicable percentage, as determined by the taxpayer's adjusted gross income, times the qualified employment expenses paid.
[13] The maximum creditable expense available under IRC section 21 is $3000 (or $6000, if taxpayer household contains more than 1 dependent).
If the non-earning spouse is physically or mentally incapable of caring for himself or is a full-time student for more than five months during the year the law assumes there is an earned income.
The law assumes for each month of disability or school attendance there is an earned income of $250 if there is one dependent or $500 if there are two or more.