HARRISBURG, PA — In a visit to Widener University Commonwealth Law School on Monday, Governor Josh Shapiro and top state officials highlighted a newly enacted tax credit that will deliver $193 million in relief to nearly one million Pennsylvanians beginning next tax season. The announcement marks one of the most substantial cost-cutting measures included in the 2025–26 state budget, which the Governor signed last week.
The Working Pennsylvanians Tax Credit — a state-level version of the federal Earned Income Tax Credit — provides a benefit equal to 10 percent of the federal amount. Anyone who qualifies for the federal EITC will automatically receive the new state credit. For households strained by rising living costs, the program is designed to reduce tax burdens and increase take-home income without adding paperwork or complexity.
Speaking at the Widener tax clinic, Shapiro underscored the urgency of helping families keep pace with expenses. “Pennsylvanians are feeling the impact of rising costs,” the Governor said, noting that federal policies have intensified those pressures. “This new Working Pennsylvanians Tax Credit will put up to $805 back in the pockets of hardworking Pennsylvanians, giving them more resources to support their families.”
Lieutenant Governor Austin Davis described the credit as a straightforward way to help nearly a million residents cover basic needs, from child care to transportation. Revenue Secretary Pat Browne added that decades of research show EITC-style programs improve long-term economic and health outcomes, especially for families with children.
The credit varies by income and number of dependents, with the maximum benefit set at $805. A single parent with three children earning about $23,300, for example, will receive the full amount. Married households with two or three dependents also qualify for hundreds of dollars in relief under the program. Filing will be automatic for anyone eligible for the federal credit, and free tax assistance through the Volunteer Income Tax Assistance (VITA) network will continue supporting low-income filers statewide.
The tax credit is the seventh cost-cutting measure Governor Shapiro has enacted in under three years. Other initiatives include expanded property tax and rent rebates for seniors, enhanced child and dependent care credits, student loan interest deductions, and continued reductions to the state’s Corporate Net Income Tax. State leaders emphasized that the Commonwealth’s strong fiscal footing — including an $11 billion surplus and the highest credit ratings in more than a decade — enables ongoing investment in programs that reduce household expenses.
Legislative leaders from both chambers called the credit an essential tool for families navigating high costs. Advocates and community partners echoed that message, pointing to the difference an extra few hundred dollars can make for households juggling food, housing, and caregiving responsibilities.
With the measure now in place, state officials say the 2025–26 tax season will bring meaningful relief to workers across all 67 counties — a shift they frame as critical to keeping families afloat and local economies strong.
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