Shusterman touts Childcare & Dependent Care Tax Credit expansion

Business community applauds efforts for workforce development

HARRISBURG, Dec. 14 – State Rep. Melissa Shusterman, D-Chester, is the co-prime sponsor of legislation (H.B. 1259) that expands the state’s Child and Dependent Care Enhancement Tax Credit.

Shusterman has been a tireless advocate for the state-level tax credit and applauded the inclusion of it in the state Fiscal Code passed by the legislature Wednesday evening and immediately signed into law as Act 34 of 2023 by Gov. Josh Shapiro.

Availability and affordability of child care are a grassroots focus of business organizations across the state, she said.

This provision expands Pennsylvania's Child and Dependent Care Enhancement Tax Credit by significantly increasing the percentage taxpayers can claim on their 2023 state tax return.

“Here in the Commonwealth, quality childcare for one child averages over $12,000 a year and is often more than that in many parts of the state,” Shusterman said. “Employers need workers, and working families need child care they can afford. In collaboration with Representative Tina Davis of Bucks County, I’m proud to have worked on legislation for this tax credit that was included in our Commonwealth’s Fiscal Code bill. And I applaud the Chester County Chamber of Business and Industry’s president & CEO, Laura Manion, who really spearheaded this message for 2023.”

“As a soon-to-be mom of two, I'd like to thank Representative Shusterman and her colleagues in the General Assembly for their work on ensuring the Childcare and Dependent Care Tax Credit was part of the budget code bills finalized yesterday,” said Manion. “The Chester County Chamber of Business & Industry was proud to partner with Representative Shusterman on this initiative to help working families and employers. A childcare tax credit was included in the budgets for the previous two years, and Act 34, signed by the governor yesterday, expands the program to ease child and dependent care costs for Pennsylvania’s working families. 

Local chambers, such as CCCBI, have consistently heard from employers across the Commonwealth that the lack of accessible and affordable child care hampers their ability to hire workers.” Manion added. “This is a monumental win for both employees and employers across Pennsylvania.” 

Pennsylvania’s families can claim a childcare and dependent tax credit when they file their federal and state tax returns. Eligible families who qualify for the federal Child and Dependent Care Tax Credit are eligible for the state tax credit, which in 2022 was equal to 30% of the federal credit.

Pennsylvania will now provide a 100% match to the federal tax credit. Nearly a quarter million of the state’s working families will see their state tax credit for child care and dependent care more than triple.

This means money back for childcare expenses – one of the biggest burdens on working families. It’s also money back for dependent care expenses – helping to ensure family members incapable of taking care of themselves have safe and reliable care.

Qualifying PA families will receive the expanded tax credit when they file their 2023 returns:

  • Tax filers are eligible for the state credit if they qualify for the federal credit.
  • The current one-child credit of $180 can increase to as much as $1,050, depending on household income and expenses.
  • The current two-or-more children credit of $360 can increase to as much as $2,100, depending on household income and expenses. 

“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,” Shusterman said.