With less than a month to go before the deadline for filing personal income tax returns, the Department of Revenue is reminding Pennsylvanians that there is a new state tax credit available that can help ease child and dependent care costs for working families.
Eligible Pennsylvanians can claim the Child and Dependent Care Enhancement Tax Credit when they file their Pennsylvania Personal Income Tax Return (PA-40). This credit can range between $180 and $630, depending on your income level and the number of your dependents.
“We estimate there are more than 220,000 families in Pennsylvania that can benefit from this credit when they file their state tax returns,” said Acting Secretary of Revenue Pat Browne. “Research has shown that the expansion of a similar tax credit on the federal level significantly reduced childhood poverty, addressed food insecurity, and helped many families secure their finances. We want to ensure that the state tax credit in Pennsylvania has a similar impact, so the Shapiro Administration is working to get the word out and help everyone who is eligible receive this benefit.”
This tax credit program was established to help working individuals and families pay for child and dependent care services necessary for them to maintain their jobs or seek employment. That, in turn, allows them to provide for their families and contribute to the economic growth of the Commonwealth.
The Child and Dependent Care Enhancement Tax Credit that is available to Pennsylvanians 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 equal to 30 percent of the federal credit, meaning it will be:
- $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.
In order 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.
This credit is refundable, meaning qualified taxpayers will not owe any state taxes on the amount they receive.
