Expanded child care tax credit passes House, faces challenge in Senate
By Christen Smith | The Center Square
HARRISBURG, PA – An expanded version of Pennsylvania’s childcare tax credit cleared the state House, but what’s next for bipartisan legislation?
Senate Republicans, who control the upper chamber with a comfortable majority, will likely take issue with the credit’s cost: a projected $97.5 million next year, ballooning to $354.6 million by the end of Gov. Josh Shapiro’s first term.
The price tag bewildered House Republicans, who said the broad language treats “millionaires and people living at the poverty line the exact same” by eliminating the program’s existing wage limits.
The legislation would provide a 30% tax credit on the total amount of childcare costs claimed, or $3,000 for one child and $6,000 for multiple dependents – whichever is less. This figure climbs to 50% by 2027, or a maximum of $5,000 and $10,000.
This year, families received between $180 and $630 with their tax returns, depending on income and dependents. House Democrats said the generous expansion aligns more closely with the federal credit and keeps parents in the workforce – a top priority for Democrats, Republicans and the governor alike.
The divided chambers will likely spar over the final package, with Republicans concerned about its ballooning cost in relation to an uncertain economy in the coming years. Democrats, buoyed by sunnier expectations and unexpected revenues, believe the investment will ultimately generate more income via a growing workforce.
