The Chester County Chamber of Business and Industry (CCCBI) was proud to partner with over 50 other business organizations, as well as the General Assembly and Governor Shapiro Administration in support of the Child and Dependent Care Enhancement Tax Credit. ACT 34, signed into law by Governor Josh Shapiro on Dec. 13, expands the tax credit to support both working families and employers.  

Laura Manion, President of the Chester County Chamber (CCCBI) said, “As a soon-to-be mom of two, I’d like to thank Representative Melissa Shusterman and her colleagues in the General Assembly for their work on ensuring the Childcare Tax Credit was part of the budget code bills finalized last week. Our chamber was proud to partner with her on this initiative to help working families and businesses. Business advocates such as CCCBI have consistently heard from employers from across the Commonwealth on how the lack of accessible and affordable childcare is hampering their ability to hire because potential workers can either not find childcare or afford it. This is a monumental win for both employees and employers across Pennsylvania.” 

“I know that hardworking families across our Commonwealth are struggling with rising costs, including the cost of childcare. A lack of affordable childcare not only holds back our children and parents, but holds back Pennsylvania’s economy,” said Governor Josh Shapiro. “That’s why I was proud to sign a bill into law to expand the childcare tax credit, putting more money back in families’ pockets and helping them provide for their kids by easing child and dependent care costs. Under this new law, a family with two kids in childcare who previously received $630 will now be eligible to receive $2100. My Administration will continue to invest in commonsense solutions and deliver real results to support the good people of Pennsylvania and build a stronger economy for all.” 

House Democrat Leader, Rep. Matt Bradford (D-Montgomery), “Caregivers shouldn’t need to choose between going to work or having quality care for a child or aging loved one. House Democrats delivered on our commitment and secured enhanced tax credits for 220,000 Pennsylvania families, who can begin claiming their credit on their 2023 taxes. Prioritizing access to affordable child and dependent care is a win for families, a win for our workforce, a win for businesses and a win for our economy.” 

Rep. Melissa Shusterman (D-Chester), said, “Employers need workers, and working families need childcare they can afford. I’m proud of the push to elevate this legislation because it means substantial cash in the pockets of working parents. As a working mother who relied on year-round childcare, a tax credit like this would have made tax time more bearable – to know that the state and lawmakers were acknowledging my struggles and helping mothers like me to ease the burden of the high cost of quality childcare.” 

“I’ve heard from families across my district about the struggles of finding and affording a quality early education program for their children,” said Rep. Joe Hogan (R-Bucks). “That is why I was proud to cosponsor the bipartisan HB 1259 and supported its inclusion in the final code bills. Providing families with this tax relief isn’t a partisan issue, its critical to grow our economy, provide security to working parents, and make Pennsylvania first for all families.”    

“Out of all the critical policy goals of the business community, the Childcare Tax Credit seemingly had the most bi-partisan support during the stalled state budget negotiations. This was demonstrated by the fact that a standalone bill, HB 1259 (Davis/ Shusterman), which expanded the benefit passed the House of Representatives by 141-62 in June and the final fiscal budget code bill, which included language from HB1259, passed December by 154-49 in the House and 45-5 in the Senate,” explained Alex Rahn, Government Affairs Consultant for CCCBI. 

CCCBI’s advocacy efforts included items such as: an opinion piece in the Daily Local News, testimony before the House Children & Youth Committee, a joint letter from 55 Chambers to the full General Assembly, further testimony before the House Finance Committee on HB1259, two press conferences with PA Legislators, Chambers, employers, business and childcare stakeholders to highlight importance of the issue, and outreach to decision makers including another joint letter (attached) asking the General Assembly to finalize the budget and at a minimum include the Childcare Tax Credit due to it having more bipartisan support than some of the other items that were being negotiated during the budget impasse.  

As reported by the PA Secretary of Revenue, the Child and Dependent Care Enhancement Tax Credit is based on the federal Child and Dependent Care Tax Credit. That means that taxpayers must receive the federal credit to also be eligible for the state credit in Pennsylvania. The state credit is now equal to 100 percent of the federal credit, meaning:  

• The maximum credit will be $1,050 (one child) or $2,100 (two or more children). 
• The credit cap phases down as income levels increase. 
• The minimum credit will be $600 (one child) or $1,200 (two or more children). 

To claim the credit on your PA Personal Income Tax Return (PA-40), you must have incurred care expenses for: 

• A dependent child under age 13. 
• A spouse who was physically or mentally incapable of self-care and lived with you for more than half the year. 
• An individual who was physically or mentally incapable of self-care, lived with you for more than half the year, and either: 
• Was your dependent; or 
• Could have been your dependent, except that he or she received gross income of $4,400 or more, filed a joint return, or could have been claimed as a dependent on another taxpayer’s return. 

The credit is refundable, meaning qualified taxpayers will earn the full amount of the credit in a refund, after accounting for any tax obligation due. 

For more information on the Child and Dependent Care Enhancement Tax Credit, Pennsylvanians can go here.

Learn more at the Chester County Chamber of Business & Industry.