As a part of the 2022 PA budget, a brand-new childcare tax credit has become available to Pennsylvanian families. It is modeled after the Federal Child and Dependent Care credit, so if you qualify for the federal program, you will likely qualify for the state credit as well.
Key Points:
- All parents in the household must be working to qualify for this credit [see Federal credit rules]
- The credit is not set to expire and will remain in effect unless the PA Congress removes it in a future budget.
- The credit is “refundable.” If you don’t owe PA State taxes, you will receive the credit as a refund.
Tax Credit Amounts:
- $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.
All communication from the Governor’s office has noted that this credit will be available for state returns filed in 2023. We are assuming that it will be available for your 2022 tax return. As of this writing, PA has not released their 2022 PA-40 returns.