Stimulus Update: Pennsylvania Expands State’s Child Tax Credit for Over 200,000 Families — How Much More They’ll Make
Written by
David Nadelle
Edited by
Cory Dudak
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Last week, Pennsylvania Governor Josh Shapiro signed into law important funding for indigent defense, environmental repairs and student mental health, and legitimized a major expansion of the state’s Child and Dependent Care Enhancement Tax Credit that will significantly help Pennsylvanian working families with child care costs.
Six months past its due date, the Pennsylvania state budget is finally compete, despite contentious debates and a Taylor Swift celebratory sidebar. Taxpayers will now get their federal Child Tax Credit matched 100% through the state Child and Dependent Care Enhancement Tax Credit.
“We know from the tax returns that we have received this year that the Child and Dependent Care Enhancement Tax Credit delivered critical relief to roughly 210,000 families in Pennsylvania,” said Secretary of Revenue Pat Browne.
“Research has shown that a similar tax credit on the federal level significantly reduced childhood poverty, addressed food insecurity, and helped many families secure their finances,” Browne added. “It was the right decision to expand our Pennsylvania credit to take another step toward making our Commonwealth a better place to live and raise a family.”
Who Is Eligible for the Pennsylvania Child and Dependent Care Tax Credit?
It’s important to note that the PA refundable credit is based on and is equal to 100% of the federal Child and Dependent Care Tax Credit. Pennsylvania taxpayer MUST receive the federal credit in order to be eligible for the newly enhanced state tax credit.
Per the Pennsylvania Department of Revenue, the credit ranges from $600 to $2,100 and takes into account an applicant’s income level and number of dependents. That’s a jump from a maximum of $1,200.
- The maximum credit will be $1,050 (one child) or $2,100 (two or more children).
- The credit cap phases down as income levels increase.
- The minimum credit will be $600 (one child) or $1,200 (two or more children).
Who Qualifies Eligible for the Pennsylvania Child and Dependent Care Tax Credit?
According to the Pennsylvania Pressroom site, you will be able to claim this credit on your PA Personal Income Tax Return (PA-40) if you’ve incurred care expenses for:
- A dependent child under age 13.
- A spouse who was physically or mentally incapable of self-care and lived with you for more than half the year.
- An individual who was physically or mentally incapable of self-care, lived with you for more than half the year, and either was your dependent, or could have been your dependent, except that he or she received gross income of $4,400 or more, filed a joint return or could have been claimed as a dependent on another taxpayer’s return.
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