Expanded Childcare Tax Credit: A Ray of Hope for Pennsylvania Families and Economy

Governor Josh ShapiroGovernor Josh Shapiro addresses members of the press and distinguished guests at the Upper Main Line YMCA in Berwyn and is pictured with Representative Melissa Shusterman and House Leader Matt Bradford, who championed the expansion of the PA Child and Dependent Care Tax Credit. /Submitted Image

BERWYN, PAIn case you missed it, Governor Josh Shapiro recently joined forces with legislative leaders and the Chester County Chamber of Business & Industry to spotlight a significant expansion of the Child and Dependent Care Tax Credit. The announcement, made at the Upper Main Line YMCA in Chester County, is set to benefit over 210,000 Pennsylvania families.

The backdrop of the YMCA was not a random choice. As the largest provider of childcare services in the state, it serves over 65,000 children through its programs. In Chester County alone, the YMCA of Greater Brandywine (YGBW), an association of nine locations including the Upper Main Line YMCA, provides childcare services to more than 4,500 children and their families.

However, the burden of childcare costs weighs heavily on Pennsylvania families. In 2023, the average cost of childcare in the state ranged from $9,000 – $13,000 per child, accounting for more than 15 percent of a median family’s annual income. This financial strain has economic implications beyond individual households. According to the U.S. Chamber of Commerce, lack of reliable, consistent childcare leads to an annual loss of $3.47 billion in earnings, productivity, and tax revenue for Pennsylvania’s economy.

To alleviate this burden, the YMCA awards upwards of $2MM each year in financial assistance for programs like childcare, summer camp, before and after school enrichment, and critical health and wellness programs. Last year, YGBW allocated 38% more financial aid for childcare programming compared to 2022, a testament to the growing need in the community.

Despite these efforts, childcare centers across the Commonwealth are still struggling. Since the pandemic began, over 2,000 childcare centers have permanently closed, with rising operational expenses and staffing issues exacerbating the crisis.

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Bertram L. Lawson II, President and CEO of YGBW, emphasizes the broader implications of this crisis. “The childcare crisis impacts our staff, the families that we serve and the community at large,” he said. The expanded state Childcare Tax Credit, according to Lawson, will allow more parents to return to work and help childcare providers to grow and remain sustainable.

This expansion is a vital investment in working families, the economy, and Pennsylvania’s future, as articulated by Senator Carolyn Comitta. “I hope we can continue to work together to support access to affordable, quality childcare and invest in childcare providers, workers, and programs,” she said. “They are a crucial part of the infrastructure that prepares our communities for tomorrow and keeps our economy growing.”

The expansion of the Child and Dependent Care Tax Credit brings a glimmer of hope to the thousands of families grappling with the high cost of childcare and its impact on their daily lives. As Representative Melissa Shusterman put it, “This tax credit means real money for working parents and that can be a game-changer.”

Individuals interested in learning more about the tax credit and how it will impact their families are encouraged to visit pa.gov/childcaretaxcredit.

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