Child and Dependent Care Tax Credit for over 210,000 Pennsylvania families. The bipartisan legislation, signed into law by the Governor in December, expands the existing tax credit to match 100 percent of the federal credit, helping Pennsylvania families offset the burden of rising childcare costs.
“This expanded tax credit is a prime example of government working together to deliver real, tangible results for the people of Pennsylvania. We’re cutting costs, putting money back in people’s pockets, and helping families get by,” said Governor Josh Shapiro. “Here in York County, parents often spend more than $10,000 on childcare every year.
For many, that’s more than 13% of their annual income – and that’s just the cost of caring for one child. As a father of four, I get it. We owe it to Pennsylvanians to make these kinds of investments that cut costs, put money back in their pockets, and help our families succeed.”
In 2023, the average cost of childcare in Pennsylvania was between $9,000 to $13,000 – representing nearly 15 percent of the median family’s annual income. Additionally, Pennsylvania’s economy loses $3.47 billion dollars every year in lost earnings, productivity, and tax revenue because families can’t access reliable, consistent childcare.
Governor Shapiro knows that a lack of affordable childcare holds back our children, parents, and our economy – and thanks to this recent expansion, 210,000 Pennsylvania families, including more than 7,000 families in York County, will benefit.
The major expansion signed into law by Governor Shapiro means the maximum credit will be $1,050 for one child or $2,100 for two or more children. Prior to this expansion, the maximum credit Pennsylvania families could receive was up to $315 for one child or $630 for two or ore children. Under the new law, Pennsylvanians could receive a tax credit more than three times larger than the credit they received last year.
“The average cost of high-quality childcare is roughly $1,000 a month – or $12,000 a year – a financial burden that many working families cannot afford,” said Representative Carol Hill-Evans. That’s why I am so thrilled with the newest tax credit program designed to put more dollars into the pockets and budgets of nearly a quarter million working families. 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.”
The state tax credit received bipartisan support from the House and the Senate as part of the fiscal code bill that built on the commonsense, bipartisan 2023-24 budget.
Expanding the Childcare Tax Credit, unequivocally has a direct and positive impact on our economy in Pennsylvania. This program benefits our neighbors, coworkers, family members, and working families across York County and our state,” said Kevin Schreiber, CEO of the York County Economic Alliance. “Without access to childcare, individuals cannot get to work. Making childcare affordable is good for employers, our workforce, and the economic competitiveness of our Commonwealth. Not to mention the thousands of kiddos who will benefit from access to education at an earlier age. We applaud Governor Shapiro and legislative leaders on adopting this bipartisan legislation.”
“At YWCA York, 245 children are provided with access to safe and quality childcare programs designed to encourage each child’s individual emotional, social, intellectual, creative, cultural, and physical development in a safe, nurturing environment,” said YWCA York CEO Kim Bracy. “We are positive Governor Shapiro’s enhancement to the Child and Dependent Care Tax Credit will be extremely beneficial to our 200-plus families that trust us with their most prized possessions on a daily basis. Thank you, Governor Shapiro, for stopping by YWCA York and spending your afternoon with us.”
“Thank you, Governor Shapiro, for this tremendous opportunity to share how beneficial the increased Child and Dependent Care Tax Credit will be for my family due to having children actively participating in a quality childcare program, such as YWCA York’s. Especially at a time when the most essential items needed to care for your family are on a consistent rise – from food, toiletries, clothing, extra-curricular activities, and more, having access to additional finances to provide for my family will assist greatly in offsetting our cost of living,” said YWCA Parent Quinn Howard.“Thank you, Governor Shapiro, for addressing this and placing money into the pockets of Pennsylvanians such as myself to ensure we have the resources available to care for our families.”
For more information about the Childcare and Dependent Care Tax Credit, visit pa.gov/childcaretaxcredit.
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