(The Center Square) – Families will see a boost in their tax returns in 2024 after the state expanded its Child and Dependent Care tax credit.
The expansion – part of a wider series of bills that direct state spending on programs for schools, the criminal justice system, hospitals and emergency services – will refund 100% of child care costs incurred for working parents.
The new rules allow individuals to claim 100% of the federal credit they claimed. That’s up to $3,000 for a single dependent and $6,000 for two or more.
The “historic” bump means one-child families will receive a credit worth as much as $1,200, while those with multiple children could receive as much as $2,100.
More than 200,000 families across the state will benefit from the expansion, many of which are grappling with barriers to access and skyrocketing childcare costs.
According to the Department of Labor, the median expected cost of care for younger children in 2022 ranged $8,310 from to $17,171. Statistics show the “prohibitive” price tag forces women to leave the workforce in higher numbers.
Gov. Josh Shapiro said in a press release that “a lack of affordable childcare can hold back our children, parents, and economy,”. With the expansion, the administration hopes to “ease child and dependent care costs for working Pennsylvania families.”
The bill is not without a price tag. The projected cost for the credit in 2023-2024 sits at $83.3 million and $124.9 million in 2024-2025. This reflects a jump of $57.4 million and $87.4 million from the state’s General Fund, respectively.
Advocates of the credit say it’s a small sacrifice to support families, one that will ultimately lead to a boost in the economy.