Employer Child Care Contribution Tax Credit Program Overview

ICYMI: New Op-Ed Highlights ‘Win-Win’ for PA Employers Who Receive Tax Credit for Helping Employees with Child Care Expenses

State Senator Judy Schwank says the General Assembly “… has advanced real solutions in recent years, working alongside Gov. Josh Shapiro and his administration, to provide meaningful support to working families and child care providers.”

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One of seven tax cuts that Governor Shapiro has fought for since taking office, the Employer Child Care Contribution Tax Credit helps PA employers support their workers and strengthen employee retention.

April 09, 2026
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Harrisburg, PA — Yesterday, in a new Op-Ed in the Reading Eagle, state Senator Judy Schwank highlighted a Commonwealth tax credit program signed into law under Governor Josh Shapiro’s tenure that is designed to help make child care more affordable and accessible.

The Employer Child Care Contribution Tax Credit gives Pennsylvania employers a break on their state taxes when they provide their employees with qualifying financial support to cover child care or early learning programs. This program is one of seven tax cuts that Governor Shapiro has fought for since taking office.

Signed into law as part of the 2024-25 budget, the program is based on a bill that Senator Schwank introduced in the Senate. Employers can receive a tax credit equal to 30% of their employees’ eligible child care costs (with a maximum contribution of $500 per employee).

Read the new Op-Ed in the *Reading Eagle* here and below:

Pa. employers can cut tax bill while helping employees afford child care [opinion]

Programs are making a difference for families, but more needs to be done.

By Sen. Judy Schwank, April 8, 2026

Throughout my career in Pennsylvania’s General Assembly, child care has always been an issue that is deeply personal for me. As a single mom many years ago, I faced my fair share of challenges trying to find quality child care I could depend on. Long waitlists and affordability made it very difficult to find a place for my child, and yet, all these years later, I’m watching many of my constituents deal with the same problems I did.

There is no question that this is an area where my colleagues in the Legislature and I have a lot of work to do to meet the needs of young families. But I’m proud to say that we’ve advanced real solutions in recent years, working alongside Gov. Josh Shapiro and his administration, to provide meaningful support to working families and child care providers.

A great example is the Employer Child Care Contribution Tax Credit Program. This program is based on a bill that I introduced in the Senate and was created as part of the 2024-25 budget. It is one of seven tax cuts the governor and members of the General Assembly have delivered since 2023.

The tax credit program is a win-win scenario. It allows employers to get a break on their state taxes when they provide their employees with qualifying financial support to cover child care or early learning programs. Employers can receive a tax credit equal to 30% of their employees’ eligible child care costs (with a maximum annual contribution of $500 per employee).

Employers looking to benefit from this program should start planning now. The annual application window opens on Oct. 1 and closes on Jan. 31 of the following year.

The Department of Revenue, which administers this program, has created a new online application through its myPATH tax system and provides a step-by-step video tutorial to walk employers through the process.

Beyond this program, the General Assembly and governor have also tripled the relief available through the Child and Dependent Care Enhancement Tax Credit. This is a critical step toward easing child and dependent care costs for working Pennsylvanians. Based on the most recent data available, it annually delivers approximately $139 million to nearly 220,000 Pennsylvanians.

Another win for Pennsylvania families is the recent creation of the new Working Pennsylvanians Tax Credit, or WPTC. Based on the federal Earned Income Tax Credit, or EITC, the WPTC is equal to 10% of the EITC and can deliver up to $805 to eligible Pennsylvanians. It is expected to deliver $193 million to approximately 940,000 Pennsylvanians during the current tax season.

Additionally, we have delivered much-needed support to Pennsylvania’s child care workforce. The 2025-26 budget secured $25 million in new funding to provide 55,000 child care workers with at least $450 retention bonuses through the Child Care Recruitment and Retention Program. I am urging my colleagues to support the governor’s request for an additional $10 million investment in this program as part of his budget proposal for the coming fiscal year.

We all have a vested interest in the success and development of our youngest citizens. That’s why child care is a necessity and an investment in the long-term success of our commonwealth. It gives our kids the opportunity to start building the skills that will give them a leg up when they reach kindergarten and first grade while giving parents and guardians the freedom to be productive in the workplace or pursue the higher education and job training they need to increase their earning potential.

Like so many Pennsylvania families, I lived through the struggle of finding and affording quality child care. We are making real progress, and I plan to keep fighting until Pennsylvania has the child care system our families deserve.

Sen. Judy Schwank, a Wyomissing Democrat, represents portions of Berks County.

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