Pennsylvania has a new child care tax credit. Here’s what you need to know. · Spotlight PA

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HARRISBURG – Governor Tom Wolf has approved a new, permanent tax credit for child care that will enable families to claim thousands of dollars in benefits.

The new tax credit was created as part of Pennsylvania’s new $ 45.2 billion budget, which Wolf signed into law in early July.

Wolf and lawmakers also allocated more than $ 140 million to a one-time extension of a property tax credit for low-income and older Pennsylvania residents. Here’s what you need to know about these credits and how to access them:

The Pennsylvania Child Care Tax Credit

What does it do? Based on the federal child tax credit, the child and dependent care improvement program will reimburse up to 30% of child care-related expenses that applicants claim on their federal return. This program is intended to support working families by reducing their tax liability. A total of $ 24.6 million went into the program, which is now a permanent part of the state’s tax code.

Who is eligible? People who have one or more dependents and fall below a certain income level are eligible. For people who care for one dependent, expenses claimed cannot exceed $ 3,000. For those with two or more dependents, it can be no more than $ 6,000.

The percentage of expenses that can be credited will vary depending on income level, but that detail has yet to be determined. According to a State House Budget Committee representative, the rules will be similar to those for federal returns.

Married couples with an annual income of up to $ 150,000 or a single file earned half of what is eligible for the full amount of federal tax credit in 2021.

How is it claimed? This credit can be claimed when state taxes are filed starting in 2023. The rebate will be deducted from the total amount of tax due to the state. If the amount credited is worth more than the amount of tax due to the state, the rebate will be refunded to the file.

The (temporary) boost for property tax relief

What does it do? This one-time grant temporarily increases the state’s property tax / rent rebate program.

Under the current program, qualifying Pennsylvanians receive discounts ranging from $ 650 to $ 975, depending on whether the file is a tenant or homeowner.

This year’s budget uses $ 140 million in federal stimulus money to extend one-year payments by 70%. If a person already received $ 975 from the program last year, they will receive an additional $ 682.50.

Who is eligible? The program benefits Pennsylvania residents 65 or older, widows over 49, and people with disabilities age 18 and older. Homeowners with an annual income below $ 35,000 are eligible, as well as tenants with an annual income below $ 15,000 (certain types of income are excluded).

How is it claimed? Anyone who received a property tax or rent rebate during the 2021 tax season will automatically be eligible for the additional rebate. A person can apply for the rebate program on the State Department of Revenue’s website for next year’s tax season, although they will not receive the additional money.

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