1.26 Ark. Code R. 51-502(a)&(b)(1)

Current through Register Vol. 49, No. 10, October, 2024

Rule 1.26-51-502(a)&(b)(1) - General Requirements for the Credit

A credit against individual income tax owed to the State of Arkansas is allowed for expenses associated with household and dependent care services that are necessary for the taxpayer to obtain or hold gainful employment. Section 21 of the Internal Revenue Code of 1986, as amended and in effect on January 1, 1997, has been adopted for purposes of calculating this credit. The corresponding Treasury Regulation, as of January 1, 1993 remains IRC Reg. 1.44A-1.

As set forth in IRC Reg. 1.44A-1 (1993), five (5) general requirements must be satisfied before the credit can be taken:

1. The taxpayer must maintain a household. IRC Reg. 1.44A-1(a)(2) and (d);

2. One or more "qualifying individuals" must be a member of the taxpayer's household. IRC Reg. 1.44A-1(a)(2) and (b);

3. The household and dependant care expenses must be necessary for the taxpayer to obtain or hold gainful employment. IRC Reg. 1.44A-1(a)(2) and (c);

4. The services provided, whether they are provided inside the household or outside the household (including services provided by dependent care centers), must meet the specific requirements of IRC Sec. 21. IRC Reg. 1.44A-1(c)(2), (c)(3), (c)(4) and (c)(5).

5. The household and dependent care expenses must actually be paid during the tax year for which the credit is being claimed. IRC Reg. 1.44A-1(a)(3).

1.26 Ark. Code R. 51-502(a)&(b)(1)