Pa. dramatically expands child and dependent care tax credits
Pennsylvania moms and dads will receive an extra chunk of change this tax season, thanks to an expansion made official in December.
Governor Shapiro signed bipartisan legislation to expand the state’s Child and Dependent Care Enhancement Tax Credit.
A person can claim the credit on their PA Personal Income Tax Return (PA-40) if they have a child under the age of 13, or live with an individual who is mentally or physically unable to care for him or herself.
“For a lower income family with 2 kids in childcare, their refundable tax credit, this past year in 2023, was $630. A nice credit, but only $630,” Shapiro said at a press conference. “Starting this year, that same family is going to get $2,100.”
Previously, the state matched 30% of the federal credit Pennsylvanians’ received. Now, the state is matching 100%. $2,100 will be the maximum credit for a family of two or more children.
The U.S. Chamber of Commerce found that the state’s economy and tax revenue struggle as a result of rising childcare costs.
“When we make it a little bit easier for Pennsylvanians to find care for their children and loved ones… we all benefit,” Shapiro said. “That strengthens our businesses, that strengthens our workforce.”