I:14-29 The credit for employer-provided child care has two major components, a credit for qualified child care expenses and a credit for qualified child care resources and referral expenditures.

a. Discuss each of the two components. What type of expenses are included in each component?

b. The two components are combined to compute the credit for employer-provided child care.

Discuss the rates for each component, the limitation for the credit, and the tax result if the employer ceases to offer child care operations within the first three years after claiming the credit.