New PA Finances Contains Little one Tax Credit score, Property Tax Aid Enhance

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By Kate Huangpu & Stephen Caruso | Highlight PA

College students on the Willow College in Montgomery County.
Credit score: Thomas Hengge/Philadelphia Inquirer

Gov. Tom Wolf has accredited a brand new, everlasting little one care tax credit score that may permit households to assert hundreds of {dollars} in advantages.

The brand new tax credit score was created as a part of Pennsylvania’s new $45.2 billion price range, which Wolf signed into legislation in early July.


Wolf and lawmakers additionally allotted over $140 million to a one-time growth of a property tax credit score for low-income and older Pennsylvanians. Right here’s what you want to find out about these credit and how one can entry them:

The Pennsylvania little one care tax credit score

What does it do? Modeled off of the federal Little one Tax Credit score, the Little one and Dependent Care Enhancement Program will return as much as 30% of kid care-related bills that filers declare on their federal return. This program is supposed to assist working households by lessening their tax legal responsibility. A complete of $24.6 million went into this system, which is now a everlasting fixture of the state’s tax code.


Who’s eligible? Individuals who have a number of dependents and fall below a sure earnings degree are eligible. For individuals who look after one dependent, bills claimed can’t surpass $3,000. For these with two or extra dependents, it can’t surpass $6,000.

The proportion of bills that may be credited will range relying on earnings degree, however that element has but to be decided. Per a state Home price range committee consultant, the foundations might be much like these for federal returns.

Married {couples} with as much as $150,000 in annual earnings or a single filer who made half that had been eligible for the total quantity of the federal tax credit score in 2021.

How is it claimed? This credit score might be claimed when submitting state taxes starting in 2023. The rebate might be subtracted from the whole quantity of taxes owed to the state. If the quantity credited is value greater than the quantity of taxes owed to the state, the rebate might be refunded to the filer.

The (short-term) enhance for property tax reduction


What does it do? This one-time allocation quickly boosts the state’s Property Tax/Hire Rebate Program.

Beneath the present program, eligible Pennsylvanians obtain rebates starting from $650 to $975 relying on whether or not the filer is a renter or house owner.

The yr’s price range makes use of $140 million in federal stimulus cash to develop funds for one yr by 70%. If an individual already obtained $975 from this system final yr, they are going to get a further $682.50.

Who’s eligible? This system advantages Pennsylvanians 65 or older, widowed individuals older than 49, and folks with disabilities age 18 and older. Owners with annual incomes below $35,000 are eligible, as are renters with annual incomes below $15,000 (sure sorts of earnings are excluded).


How is it claimed? Anybody who obtained a property tax or lease rebate through the 2021 tax season is robotically eligible for the extra rebate. Pennsylvanians can nonetheless apply for the 2021 rebate program and procure the 70% bonus rebate till the top of this yr. Nonetheless, the bonus rebate won’t be obtainable for these making use of to subsequent yr’s rebate program.

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