PA working families to benefit from new child care tax credit

To help ease child care costs for working families, the Wolf Administration and General Assembly is investing $25 million in the new child care tax credit program. 

The program is designed to benefit working families with children in child care who qualify for the federal child and dependent tax credit. In Pennsylvania, more than 220,000 received the federal credit, and it is expected that the same amount of families will qualify for the new state tax credit. 

The credit can be claimed beginning in 2023 when filing state taxes. It is refundable, meaning state taxes will not be owed by qualified families on the amount received. 

The average tax credit is estimated to be $171, but the amount received will be income-based. Pennsylvanians paying for child care services could be eligible for the following credits: 

• $180 (one child) or $360 (two or more children) for households earning above $43,000 or 
• $315 (one child) or $630 (two or more children) for households earning less than $43,000. 

“As a parent, I know first-hand that high-quality, affordable child care is invaluable to parents, kids, and families,” said Department of Human Services Acting Secretary Meg Snead, who recently visited the Carlisle Early Education Center (CEEC) to meet with child care center staff and providers. 

“I want to thank child care providers like Carlisle Early Education Center because the care and learning opportunities they provide are essential to helping children across Pennsylvania grow and thrive.” 

Children can be kept out of early learning programs and parents out of the workforce due to the rising cost of child care. The average annual cost of infant care in Pennsylvania is nearly $12,000, according to the Economic Policy Institute. To combat costs, new Child and Dependent Care Enhancement Program is included in the Wolf Administration’s 2022-23 state budget. The program is modeled after the federal child and dependent tax credit. 

Children who learn in high-quality child care and Pre-K programs perform better in school and are more likely to graduate, according to studies. Studies also show that high-quality early learning programs help students develop the emotional and social skills needed to succeed in school and life. 

Individuals interested in locating licensed child care programs in Pennsylvania can visit www.findchildcare.pa.gov. Families who are having difficulty finding a provider or who  are lower income and need assistance paying for child care can contact their local Early Learning Resource Center at www.raiseyourstar.org.