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Governor Wolf announces new state child care tax credit

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Governor Tom Wolf joined state leaders and childcare workers to tout a new state child care tax credit on Tuesday.

At the Early Learning Center at Crispus Attucks in York, Wolf stated that childcare is close to being “unaffordable.”

“We have got to figure out how to make it affordable, accessible, and safe for everybody in Pennsylvania,” the Governor said during the news conference.

To help ease the burden on working families, the Governor announced that Pennsylvanians paying for child care services will be able to claim a credit when filing taxes starting in 2023. The state credit is modeled after the federal child care tax credit program.

The federal program allows families to claim up to $3,000 for one child in child care, and up to $6,000 for two or more, depending on income. The federal credit is then based on 20 to 35 percent of that number, and the state credit will be based on 30 percent of that.

“This can get fairly technical, but basically, it’s on top of the federal tax credit program, so it’s an additional 30 percent,” Wolf said. “We figure this is a $25 million expenditure.”

According to the Governor’s Office, families could be eligible for:

$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

“I think many of us would like to do more,” Wolf said. “But it’s a start.”

The state credit is refundable, and it’s estimated that 221,000 will benefit.

State leaders said the credit will help to provide parents with the option to return to the workforce, particularly those who may have left amid the pandemic.

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