Pennsylvania invests millions in tax credit to ease burden of child care costs
The state Department of Human Services last week announced a $25 million investment in the state’s new child care tax credit program, to ease the burden of child care costs for working families.
In recent years, child care costs have risen to staggering highs. In Pennsylvania, parents can expect to pay an average of $12,000 a year for infant care, according to the Economic Policy Institute.
To address the increased cost of infant and child care, the Wolf Administration’s 2022-23 state budget includes the Child and Dependent Care Enhancement Program, a tax credit designed to ensure working parents who want to may keep working while their kids receive quality child care.
“High-quality early education is vital to children’s learning and development,” Office of Child Development and Early Learning Deputy Secretary Tracey Campanini said in a news release. “And for parents, knowing that they have affordable, quality care for their children is immeasurable. We must do everything we can to continue supporting working parents in the commonwealth, and we owe tremendous thanks and appreciation to the child care providers who provide exceptional care to our youngest Pennsylvanians every day.”
The Child and Dependent Care Enhancement Program benefits working families with children in child care who qualify for the federal child and dependent care tax credit. The state credit, which the Wolf administration estimates will impact more than 220,000 families, may be claimed when filing taxes beginning in 2023.
The new child care tax credit is refundable, so qualified taxpayers will not owe state taxes on any amount they receive. The tax credit is income based, and the DHS estimates the average credit will be $171.
Pennsylvania households that earn more than $43,000 annually may be eligible to receive a tax credit in the amount of $180 for one child, or $360 for two or more kids.
Households that earn less than $43,000 may be eligible to receive a tax credit in the amount of $315 for one child, or $630 for two or more children.
To find affordable child care near you, visit either https://www.compass.state.pa.us/Compass.Web/ProviderSearch/Home#/BasicSearch or https://raiseyourstar.org/.