Guide to Tax Credits

Discover vital childcare tax credit opportunities for families in Pennsylvania 

This guide is your comprehensive resource for maximizing tax savings. Explore valuable credits like the Earned Income Tax Credit (EITC), providing relief for low- to moderate-income workers. Delve into the Child and Dependent Care Credit, offering significant savings for childcare expenses. Learn about VITA, offering free tax assistance for eligible families. Additionally, discover the New PA Child Care Tax Credit, providing relief for working families with dependents. With insights on eligibility, benefits, and filing procedures, this guide equips you with the knowledge to make the most of available tax credits and ease your financial burden.

2025 Tax Reconciliation Package (One Big Beautiful Bill Act - H.R. 1)

The 2025 tax reconciliation package includes updates to the federal Child and Dependent Care Tax Credit. These changes adjust income eligibility thresholds, credit amounts, and filing details for families claiming care-related expenses for dependents under age 13 or individuals incapable of self-care. View the full summary of changes in First Five Years Fund's PDF resource to understand how the updates may apply when filing 2025 returns.

Employer Child Care Contribution Tax Credit Program

The Employer Child Care Contribution Tax Credit Program encourages Pennsylvania businesses to support their employees who have children in eligible child care or early learning programs. Employers can receive a state tax credit when they make contributions toward their employees’ child care costs. The program also ensures that licensed child care providers can easily participate.

Earned Income Tax Credit

The CONNECT Helpline assists in locating resources and finding information The Earned Income Tax Credit (EITC) helps low- to moderate-income workers and their families get a tax break. If employees qualify, they can use the credit to reduce the taxes they owe – and maybe increase their refund. Share this link to the IRS EITC overview and guidelines to determine if employees qualify.
 

Child and Dependent Care Credit (PA)

Pennsylvania offers a state tax credit that can help ease child and dependent care costs for working families. Eligible Pennsylvanians can claim the Child and Dependent Care Enhancement Tax Credit when they file their Pennsylvania Personal Income Tax Return (PA-40). This credit can range between $600 and $2,100, depending on your income level and the number of your dependents. Amounts may be less if limited by childcare expenses of less than $3,000.

VITA

VITA (Volunteer Income Tax Assistance). Many working families qualify for free income tax assistance through the VITA program. Trained volunteers are available to assist individuals earning up to approximately $57,000 compete their tax return. They are also skilled at helping families with children claim the Child and Dependent Care Credit, Earned Income Tax Credit and the Child Tax Credit Cost savings like these can help families better afford quality child care!

Child and Dependent Care Credit Information (Federal)

If you paid someone to care for your child or other qualifying person so you (and your spouse if filing jointly) could work or look for work, you may be able to take the credit for child and dependent care expenses.

Your federal income tax may be reduced by claiming the credit for child and dependent care expenses on your tax return.