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 the qualifying expenses, with a maximum of $3,000 for one qualifying individual or $6,000 for two or more. Starting from taxable years after December 31, 2022, the credit will increase to 100% of the same qualifying 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 for implementation and will report annually to the General Assembly on the effectiveness of the tax credit program, including metrics such as the number of credits approved and claimed. Overall, this legislation aims to enhance support for families in Pennsylvania by providing financial relief for child and dependent care expenses.

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