I 
114TH CONGRESS 
1ST SESSION 
H. R. 259 
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 9, 2015 
Ms. LEE 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 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 sub-
section (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) 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 1 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 2 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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