This bill amends the Tax Reform Code of 1971 to introduce the Pennsylvania Child and Dependent Care Enhancement Tax Credit Program. It updates the definition of "tax credit" to include a new category under Article XIX-I, which specifically pertains to this program. The bill establishes a tax credit for taxpayers who incur employment-related expenses for child and dependent care, allowing them to claim a credit against their tax liability. For taxable years beginning after December 31, 2021, the credit will be 30% of eligible expenses, with a maximum of $3,000 for one qualifying individual or $6,000 for two or more. Starting in subsequent years, the credit will increase to 100% of the same eligible expenses.

Additionally, the bill outlines the administration of the tax credit, including the requirement for taxpayers to claim it on their tax returns and the prohibition against transferring or selling the credit. The Department of Revenue is tasked with publishing guidelines and reporting annually to the General Assembly on the effectiveness of the tax credit program. The provisions of the Internal Revenue Code of 1986 will apply to the interpretation and administration of this tax credit, ensuring alignment with federal regulations.

Statutes/Laws affected:
Printer's No. 1808 (Jun 03, 2025): P.L.6, No.2, P.L.1750, No.226
Printer's No. 1879 (Jun 10, 2025): P.L.6, No.2, P.L.1750, No.226, P.L.6, NO.2