Sec. 1301. Repeal of dependent care credit
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Subpart A of part IV of subchapter A of chapter 1 is amended by striking section 21 (and by striking the item relating to such section in the table of sections for such subpart). Section 129(a)(2) is amended by striking subparagraph (C). Section 129(e) is amended by adding at the end the following new paragraph: Rules similar to the rules of subsections
(a)and
(b)of section 7703 shall apply for purposes of this section. . Section 129(e)(1) is amended to read as follows: The term dependent care assistance means employment-related expenses and the provision of services which constitute employment-related expenses. The term employment-related expenses means amounts paid for the following expenses, but only if such expenses are incurred to enable the employee to be gainfully employed for any period for which there are 1 or more qualifying individuals with respect to the employee: expenses for household services, and expenses for the care of a qualifying individual. Such term shall not include any amount paid for services outside the employee’s household at a camp where the qualifying individual stays overnight. Employment-related expenses described in subparagraph
(A)which are incurred for services outside the employee’s household shall be taken into account only if incurred for the care of— a qualifying individual described in subparagraph (D)(i), or a qualifying individual (not described in subparagraph (D)(i)) who regularly spends at least 8 hours each day in the employee’s household. The term qualifying individual means— a dependent of the taxpayer (as defined in section 7705(a)(1)) who has not attained age 13, a dependent of the taxpayer (as defined in section 7705, 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 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. Employment-related expenses described in subparagraph
(A)which are incurred for services provided outside the employee’s household by a dependent care center shall be taken into account only if— such center complies with all applicable laws and regulations of a State or unit of local government, and the requirements of subparagraph
(B)are met. For purposes of this paragraph, the term dependent care center means any facility which— provides care for more than six individuals (other than individuals who reside at the facility), and receives a fee, payment, or grant for providing services for any of the individuals (regardless of whether such facility is operated for profit). For purposes of this paragraph, an individual shall not be treated as having the same principal place of abode as 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. If— section 7705(e) applies to any child with respect to any calendar year, and such child is under the age of 13 or is physically or mentally incapable of caring for himself, in the case of any taxable year beginning in such calendar year, such child shall be treated as a qualifying individual described in clause
(i)or
(ii)of subparagraph
(D)(whichever is appropriate) with respect to the custodial parent (as defined in section 7705(e)(4)(A)), and shall not be treated as a qualifying individual with respect to the noncustodial parent. . Section 6213(g)(2)(L) is amended by striking 21, . The amendments made by this section shall apply to taxable years beginning after December 31, 2014.