PRIOR PRINTER'S NO. 1369 PRINTER'S NO. 1480
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1259
Session of
2023
INTRODUCED BY T. DAVIS, SHUSTERMAN, BURGOS, MADDEN, McNEILL,
KAZEEM, SIEGEL, GALLAGHER, SCHLOSSBERG, HILL-EVANS, ZABEL,
SANCHEZ, PROBST, VENKAT, HOHENSTEIN, BOROWSKI, GUENST,
CIRESI, KINKEAD, STURLA, OTTEN, MERSKI, CEPHAS, D. WILLIAMS,
ZIMMERMAN, HOWARD, O'MARA, MALAGARI, CONKLIN, KRAJEWSKI,
KINSEY, RABB, ROZZI, HANBIDGE, CEPEDA-FREYTIZ, ABNEY, TAKAC,
CERRATO, GREEN, DONAHUE, FREEMAN, WARREN, TOMLINSON, HOGAN,
KRUEGER, WEBSTER AND DALEY, MAY 24, 2023
AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,
JUNE 7, 2023
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," IN PERSONAL INCOME TAX, FURTHER PROVIDING FOR <--
11 CLASSES OF INCOME; AND, in Pennsylvania Child and Dependent
12 Care Enhancement Tax Credit Program, further providing for
13 credit for child and dependent care employment-related
14 expenses.
15 The General Assembly of the Commonwealth of Pennsylvania
16 hereby enacts as follows:
17 Section 1. Section 1903-I(a) and (b) of the act of March 4, <--
18 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, added
19 July 8, 2022 (P.L.513, No.53), are amended and the section is
20 amended by adding a subsection to read:
1 SECTION 1. SECTION 303(A.7)(2)(I) OF THE ACT OF MARCH 4, <--
2 1971 (P.L.6, NO.2), KNOWN AS THE TAX REFORM CODE OF 1971, IS
3 AMENDED BY ADDING A CLAUSE TO READ:
4 SECTION 303. CLASSES OF INCOME.--* * *
5 (A.7) THE FOLLOWING APPLY:
6 * * *
7 (2) (I) THE FOLLOWING SHALL NOT BE SUBJECT TO TAX UNDER
8 THIS ARTICLE:
9 * * *
10 (E) AMOUNTS PAID OR INCURRED BY AN EMPLOYER OF AN EMPLOYE
11 FOR DEPENDENT CARE ASSISTANCE PROVIDED TO THE EMPLOYE THAT ARE
12 EXCLUDABLE UNDER SECTION 129 OF THE INTERNAL REVENUE CODE OF
13 1986, AS AMENDED.
14 * * *
15 SECTION 2. SECTION 1903-I(A) AND (B) OF THE ACT, ADDED JULY
16 8, 2022 (P.L.513, NO.53), ARE AMENDED AND THE SECTION IS AMENDED
17 BY ADDING A SUBSECTION TO READ:
18 Section 1903-I. Credit for child and dependent care employment-
19 related expenses.
20 (a) Tax credit.--[For taxable years beginning after December
21 31, 2021, a] A taxpayer who receives a credit under section 21
22 of the Internal Revenue Code of 1986 may claim a tax credit
23 against the taxpayer's tax liability in accordance with this
24 section.
25 [(b) Amount of tax credit.--The amount of the tax credit
26 under subsection (a) shall be equal to 30% of:
27 (1) the actual amount of employment-related expenses
28 incurred by the taxpayer and claimed for the Federal tax
29 credit under section 21 of the Internal Revenue Code of 1986
30 during the prior taxable year, or the following, as
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1 applicable, whichever is less:
2 (i) $3,000 for one qualifying individual with
3 respect to the taxpayer; or
4 (ii) $6,000 for two or more qualifying individuals
5 with respect to the taxpayer; multiplied by
6 (2) the applicable percent, with respect to the
7 taxpayer, in effect for the taxable year beginning after
8 December 31, 2021, and ending before January 1, 2023.]
9 (b.1) Amount of tax credit in subsequent tax years.--For
10 taxable years beginning after December 31, 2022, and ending <--
11 before January 1, 2028 DECEMBER 31, 2021, the amount of the tax <--
12 credit under subsection (a) shall be equal to the following:
13 (1) FOR THE TAXABLE YEAR BEGINNING AFTER DECEMBER 31, <--
14 2021, AND ENDING BEFORE JANUARY 1, 2023, 30% OF:
15 (I) THE ACTUAL AMOUNT OF EMPLOYMENT-RELATED EXPENSES
16 INCURRED BY THE TAXPAYER AND CLAIMED FOR THE FEDERAL TAX
17 CREDIT UNDER SECTION 21 OF THE INTERNAL REVENUE CODE OF
18 1986 DURING THE PRIOR TAXABLE YEAR, OR THE FOLLOWING, AS
19 APPLICABLE, WHICHEVER IS LESS:
20 (A) $3,000 FOR ONE QUALIFYING INDIVIDUAL WITH
21 RESPECT TO THE TAXPAYER; OR
22 (B) $6,000 FOR TWO OR MORE QUALIFYING
23 INDIVIDUALS WITH RESPECT TO THE TAXPAYER; MULTIPLIED
24 BY
25 (II) THE APPLICABLE PERCENT, WITH RESPECT TO THE
26 TAXPAYER, IN EFFECT FOR THE TAXABLE YEAR BEGINNING AFTER
27 DECEMBER 31, 2021, AND ENDING BEFORE JANUARY 1, 2023.
28 (1) (2) For the taxable year beginning after December <--
29 31, 2022, and ending before January 1, 2024, 30% of the
30 actual FOLLOWING AMOUNTS, WHICHEVER IS LESS: <--
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1 (I) THE ACTUAL amount of employment-related expenses
2 incurred by the taxpayer and claimed for the Federal tax
3 credit under section 21 of the Internal Revenue Code of
4 1986 during the prior taxable year, or the following, <--
5 whichever is less:; OR <--
6 (II) THE FOLLOWING AMOUNTS:
7 (i) (A) $3,000 for one qualifying individual <--
8 with respect to the taxpayer; or
9 (ii) (B) $6,000 for two or more qualifying <--
10 individuals with respect to the taxpayer.
11 (2) (3) For the taxable year beginning after December <--
12 31, 2023, and ending before January 1, 2025, 35% of the
13 actual FOLLOWING AMOUNTS, WHICHEVER IS LESS: <--
14 (I) THE ACTUAL amount of employment-related expenses
15 incurred by the taxpayer and claimed for the Federal tax
16 credit under section 21 of the Internal Revenue Code of
17 1986 during the prior taxable year, or the following, <--
18 whichever is less:; OR <--
19 (II) THE FOLLOWING AMOUNTS:
20 (i) (A) $3,500 for one qualifying individual <--
21 with respect to the taxpayer; or
22 (ii) (B) $7,000 for two or more qualifying <--
23 individuals with respect to the taxpayer.
24 (3) (4) For the taxable year beginning after December <--
25 31, 2024, and ending before January 1, 2026, 40% of the
26 actual FOLLOWING AMOUNTS, WHICHEVER IS LESS: <--
27 (I) THE ACTUAL amount of employment-related expenses
28 incurred by the taxpayer and claimed for the Federal tax
29 credit under section 21 of the Internal Revenue Code of
30 1986 during the prior taxable year, or the following, <--
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1 whichever is less:; OR <--
2 (II) THE FOLLOWING AMOUNTS:
3 (i) (A) $4,000 for one qualifying individual <--
4 with respect to the taxpayer; or
5 (ii) (B) $8,000 for two or more qualifying <--
6 individuals with respect to the taxpayer.
7 (4) (5) For the taxable year beginning after December <--
8 31, 2025, and ending before January 1, 2027, 45% of the
9 actual FOLLOWING AMOUNTS, WHICHEVER IS LESS: <--
10 (I) THE ACTUAL amount of employment-related expenses
11 incurred by the taxpayer and claimed for the Federal tax
12 credit under section 21 of the Internal Revenue Code of
13 1986 during the prior taxable year, or the following, <--
14 whichever is less:; OR <--
15 (II) THE FOLLOWING AMOUNTS:
16 (i) (A) $4,500 for one qualifying individual <--
17 with respect to the taxpayer; or
18 (ii) (B) $9,000 for two or more qualifying <--
19 individuals with respect to the taxpayer.
20 (5) (6) For the taxable year beginning after December <--
21 31, 2026, and ending before January 1, 2028, FOR EACH TAXABLE <--
22 YEAR THEREAFTER, 50% of the actual FOLLOWING AMOUNTS, <--
23 WHICHEVER IS LESS:
24 (I) THE ACTUAL amount of employment-related expenses
25 incurred by the taxpayer and claimed for the Federal tax
26 credit under section 21 of the Internal Revenue Code of
27 1986 during the prior taxable year, or the following, <--
28 whichever is less:; OR <--
29 (II) THE FOLLOWING AMOUNTS:
30 (i) (A) $5,000 for one qualifying individual <--
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1 with respect to the taxpayer; or
2 (ii) (B) $10,000 for two or more qualifying <--
3 individuals with respect to the taxpayer.
4 * * *
5 Section 2 3. This act shall take effect in 60 days. <--
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Statutes/Laws affected: Printer's No. 1480: P.L.6, No.2