As costs of living continue to rise, our Commonwealth must ensure we are giving working parents some relief when it comes to the cost of childcare.
 
In 2025, $139 million in tax relief was received by almost 222,000 Pennsylvanians via our state Child and Dependent Care Enhancement Tax Credit. This is a refundable credit, meaning qualified taxpayers will receive a refund of the credit in the event the credit exceeds their tax liability. The state credit is designed to mirror the federal Child and Dependent Care Tax Credit.
 
We plan to introduce legislation that will re-align the state Child and Dependent Care Enhancement Tax Credit to the federal program. For several years, the state credit has been a 100% match to the amount working parents receive from the federal credit. However, beginning with the 2026 tax year, due to changes made to the federal tax credit, the amount of credit received by eligible working parents via their federal taxes will increase. Without action by our state legislature, the state credit will not increase. It is imperative that we re-align Pennsylvania’s companion tax credit to the increased federal tax credit.
 
Additionally, our legislation will amend the state tax code so that for this program, our tax code will continue to mirror the federal changes in successive years, without having to pass legislation to make a “fix” each time there is a federal change. We believe this is a rational and more sustainable way to ensure the General Assembly continues to support working parents.
 
We hope you will join us in supporting this important legislation.