I 
116TH CONGRESS 
1ST SESSION 
H. R. 323 
To amend the Internal Revenue Code of 1986 to provide a tax credit for 
expenses for household and elder care services necessary for gainful 
employment. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 8, 2019 
Ms. LEE of California (for herself, Ms. WASSERMAN SCHULTZ, and Ms. WIL-
SON of Florida) introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
a tax credit for expenses for household and elder care 
services necessary for gainful employment. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. EXPENSES FOR HOUSEHOLD AND ELDER CARE 
SERVICES NECESSARY FOR GAINFUL EM-
PLOYMENT. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
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‘‘SEC. 25E. EXPENSES FOR HOUSEHOLD AND ELDER CARE 
SERVICES NECESSARY FOR GAINFUL EM-
PLOYMENT. 
‘‘(a) ALLOWANCE OF CREDIT.— 
‘‘(1) IN GENERAL.—In the case of an individual 
for which there are one or more qualifying individ-
uals (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 tax-
able year an amount equal to the applicable percent-
age of the employment-related expenses (as defined 
in subsection (b)(2)) paid by such individual during 
the taxable year. 
‘‘(2) APPLICABLE PERCENTAGE DEFINED.—For 
purposes of paragraph (1), the term ‘applicable per-
centage’ means 35 percent reduced (but not below 
20 percent) by 1 percentage point for each $2,000 
(or fraction thereof) by which the taxpayer’s ad-
justed gross income for the taxable year exceeds 
$15,000. 
‘‘(b) DEFINITIONS OF QUALIFYING INDIVIDUAL AND 
EMPLOYMENT-RELATED EXPENSES.—For purposes of 
this section— 
‘‘(1) 
QUALIFYING
INDIVIDUAL.—The 
term 
‘qualifying individual’ means an individual who— 
‘‘(A) has attained age 50, and 
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‘‘(B) is one of the following: 
‘‘(i) An individual who bears a rela-
tionship to the taxpayer described in sub-
paragraph (C) or (D) of section 152(d)(2) 
(relating to fathers, mothers, and ances-
tors). 
‘‘(ii) An individual would be a depend-
ent of the taxpayer (as defined in section 
152, determined without regard to sub-
sections (b)(1) and (b)(2)) as a qualifying 
relative described in section 152(d)(1) if— 
‘‘(I) in lieu of subparagraphs (B) 
and (C) thereof the following applied 
with respect to the individual: 
‘‘(aa) the taxpayer has pro-
vided over one-half of the individ-
ual’s support for the calendar 
year in which such taxable year 
begins and each of the preceding 
4 taxable years, and 
‘‘(bb) the individual’s modi-
fied adjusted gross income for 
the calendar year in which such 
taxable year begins is less than 
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the exemption amount (as de-
fined in section 151(d)), 
‘‘(II) the individual is physically 
or mentally incapable of caring for 
himself or herself, and 
‘‘(III) the individual who has the 
same principal place of abode as the 
taxpayer for more than one-half of 
such taxable year. 
‘‘(iii) The spouse of the taxpayer who 
is physically or mentally incapable of car-
ing for himself or herself. 
‘‘(2) MODIFIED
ADJUSTED
GROSS
INCOME.— 
The term ‘modified adjusted gross income’ means 
adjusted gross income determined without regard to 
section 86. 
‘‘(3) EMPLOYMENT-RELATED EXPENSES.— 
‘‘(A) IN
GENERAL.—The term ‘employ-
ment-related expenses’ means amounts paid for 
the following expenses, but only if such ex-
penses are incurred to enable the taxpayer to be 
gainfully employed for any period for which 
there are one or more qualifying individuals 
with respect to the taxpayer: 
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‘‘(i) expenses for household services, 
and 
‘‘(ii) expenses for the care of a quali-
fying individual, including expenses for res-
pite care and hospice care. 
‘‘(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 in-
curred for the care of— 
‘‘(i) a qualifying individual described 
in paragraph (1)(A), or 
‘‘(ii) a qualifying individual (not de-
scribed in paragraph (1)(A)) who regularly 
spends at least 8 hours each day in the 
taxpayer’s household. 
‘‘(C) DEPENDENT
CARE
CENTERS.—Em-
ployment-related expenses described in subpara-
graph (A) which are incurred for services pro-
vided outside the taxpayer’s household by a de-
pendent care center (as defined in subpara-
graph (D)) shall be taken into account only if— 
‘‘(i) such center complies with all ap-
plicable laws and regulations of a State or 
unit of local government, and 
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‘‘(ii) the requirements of subpara-
graph (B) are met. 
‘‘(D) DEPENDENT
CARE
CENTER
DE-
FINED.—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 re-
side at the facility), and 
‘‘(ii) receives a fee, payment, or grant 
for providing services for any of the indi-
viduals (regardless of whether such facility 
is operated for profit). 
‘‘(c) DOLLAR LIMIT ON AMOUNT CREDITABLE.—The 
amount of the employment-related expenses incurred dur-
ing any taxable year which may be taken into account 
under subsection (a) shall not exceed— 
‘‘(1) $3,000 if there is 1 qualifying individual 
with respect to the taxpayer for such taxable year, 
or 
‘‘(2) $6,000 if there are two or more qualifying 
individuals with respect to the taxpayer for such tax-
able year. 
The amount determined under paragraph (1) or (2) 
(whichever is applicable) shall be reduced by the aggregate 
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amount excludable from gross income under section 129 
for the taxable year. 
‘‘(d) EARNED INCOME LIMITATION.—Except as oth-
erwise provided in this subsection, the amount of the em-
ployment-related expenses incurred during any taxable 
year which may be taken into account under subsection 
(a) shall not exceed— 
‘‘(1) in the case of an individual who is not 
married at the close of such year, such individual’s 
earned income for such year, or 
‘‘(2) in the case of an individual who is married 
at the close of such year, the lesser of such individ-
ual’s earned income or the earned income of his 
spouse for such year. 
‘‘(e) SPECIAL RULES.—For purposes of this sec-
tion— 
‘‘(1) PLACE
OF
ABODE.—An individual shall 
not be treated as having the same principal place of 
abode of the taxpayer if at any time during the tax-
able year of the taxpayer the relationship between 
the individual and the taxpayer is in violation of 
local law. 
‘‘(2) MARRIED COUPLES MUST FILE JOINT RE-
TURN.—If the taxpayer is married at the close of 
the taxable year, the credit shall be allowed under 
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subsection (a) only if the taxpayer and his spouse 
file a joint return for the taxable year. 
‘‘(3) MARITAL STATUS.—An individual legally 
separated from his spouse under a decree of divorce 
or of separate maintenance shall not be considered 
as married. 
‘‘(4) CERTAIN
MARRIED
INDIVIDUALS
LIVING 
APART.—If— 
‘‘(A) an individual who is married and who 
files a separate return— 
‘‘(i) maintains as his home a house-
hold which constitutes for more than one- 
half of the taxable year the principal place 
of abode of a qualifying individual, and 
‘‘(ii) furnishes over half of the cost of 
maintaining such household during the 
taxable year, and 
‘‘(B) during the last 6 months of such tax-
able year such individual’s spouse is not a mem-
ber of such household, such individual shall not 
be considered as married. 
‘‘(5) PAYMENTS TO RELATED INDIVIDUALS.— 
No credit shall be allowed under subsection (a) for 
any amount paid by the taxpayer to an individual— 
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‘‘(A) with respect to whom, for the taxable 
year, a deduction under section 151(c) (relating 
to deduction for personal exemptions for de-
pendents) is allowable either to the taxpayer or 
his spouse, or 
‘‘(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 tax-
able year. 
For purposes of this paragraph, the term ‘taxable 
year’ means the taxable year of the taxpayer in 
which the service is performed. 
‘‘(6) IDENTIFYING
INFORMATION
REQUIRED 
WITH RESPECT TO SERVICE PROVIDER.—No credit 
shall be allowed under subsection (a) for any amount 
paid to any person unless— 
‘‘(A) the name, address, and taxpayer 
identification number of such person are in-
cluded on the return claiming the credit, or 
‘‘(B) if such person is an organization de-
scribed 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. 
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