Expenses are employment-related only if they are incurred to enable the taxpayer to be gainfully employed, or actively searching for gainful employment, and the expenses are for household services or for the care of a qualifying individual.

School Expenses - Only school expenses for a child below the level of kindergarten are for the care of a qualifying individual and may be employment-related.

Day Camp - Expenses for day camp may be for the care of a qualifying individual, even if the camp specializes in a particular activity. Additionally, the cost of transportation provided by a dependent care provider may be an employment-related expense.

Part-Time Employment - Taxpayers who work part-time must allocate expenses between days worked and days not worked. However, if a taxpayer who works part-time is required to pay for dependent care on a periodic basis that includes days worked and days not worked, the taxpayer is not required to allocate the expenses.

Payments to Related Individuals - A credit is not allowed for any amount paid by the taxpayer to the taxpayer's spouse or the parent of the taxpayer's child who is a qualifying individual.

Agency and Application Fees - The regulations clarify that indirect expenses such as application and agency fees may be employment-related expenses if the taxpayer is required to pay the expenses to obtain the care. Forfeited deposits do not qualify. (Reg. Sec. 1.21-1(d)(11))