PRIOR PRINTER'S NO. 1369
PRINTER'S NO. 1480
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1259
Session of
2023
INTRODUCED BY T. DAVIS, SHUSTERMAN, BURGOS, MADDEN, McNEILL,
KAZEEM, SIEGEL, GALLAGHER, SCHLOSSBERG, HILL-EVANS, ZABEL,
SANCHEZ, PROBST, VENKAT, HOHENSTEIN, BOROWSKI, GUENST,
CIRESI, KINKEAD, STURLA, OTTEN, MERSKI, CEPHAS, D. WILLIAMS,
ZIMMERMAN, HOWARD, O'MARA, MALAGARI, CONKLIN, KRAJEWSKI,
KINSEY, RABB, ROZZI, HANBIDGE, CEPEDA-FREYTIZ, ABNEY, TAKAC,
CERRATO, GREEN, DONAHUE, FREEMAN, WARREN, TOMLINSON, HOGAN,
KRUEGER, WEBSTER AND DALEY, MAY 24, 2023
AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,
JUNE 7, 2023
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," IN PERSONAL INCOME TAX, FURTHER PROVIDING FOR
CLASSES OF INCOME; AND, in Pennsylvania Child and Dependent
Care Enhancement Tax Credit Program, further providing for
credit for child and dependent care employment-related
expenses.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 1903-I(a) and (b) of the act of March 4,
1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, added
July 8, 2022 (P.L.513, No.53), are amended and the section is
amended by adding a subsection to read:
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SECTION 1. SECTION 303(A.7)(2)(I) OF THE ACT OF MARCH 4,
1971 (P.L.6, NO.2), KNOWN AS THE TAX REFORM CODE OF 1971, IS
AMENDED BY ADDING A CLAUSE TO READ:
SECTION 303. CLASSES OF INCOME.--* * *
(A.7) THE FOLLOWING APPLY:
* * *
(2) (I) THE FOLLOWING SHALL NOT BE SUBJECT TO TAX UNDER
THIS ARTICLE:
* * *
(E) AMOUNTS PAID OR INCURRED BY AN EMPLOYER OF AN EMPLOYE
FOR DEPENDENT CARE ASSISTANCE PROVIDED TO THE EMPLOYE THAT ARE
EXCLUDABLE UNDER SECTION 129 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED.
* * *
SECTION 2. SECTION 1903-I(A) AND (B) OF THE ACT, ADDED JULY
8, 2022 (P.L.513, NO.53), ARE AMENDED AND THE SECTION IS AMENDED
BY ADDING A SUBSECTION TO READ:
Section 1903-I. Credit for child and dependent care employment-
related expenses.
(a) Tax credit.--[For taxable years beginning after December
31, 2021, a] A taxpayer who receives a credit under section 21
of the Internal Revenue Code of 1986 may claim a tax credit
against the taxpayer's tax liability in accordance with this
section.
[(b) Amount of tax credit.--The amount of the tax credit
under subsection (a) shall be equal to 30% of:
(1) the actual amount of employment-related expenses
incurred by the taxpayer and claimed for the Federal tax
credit under section 21 of the Internal Revenue Code of 1986
during the prior taxable year, or the following, as
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applicable, whichever is less:
(i) $3,000 for one qualifying individual with
respect to the taxpayer; or
(ii) $6,000 for two or more qualifying individuals
with respect to the taxpayer; multiplied by
(2) the applicable percent, with respect to the
taxpayer, in effect for the taxable year beginning after
December 31, 2021, and ending before January 1, 2023.]
(b.1) Amount of tax credit in subsequent tax years.--For
taxable years beginning after December 31, 2022, and ending
before January 1, 2028 DECEMBER 31, 2021 , the amount of the tax
credit under subsection (a) shall be equal to the following:
(1) FOR THE TAXABLE YEAR BEGINNING AFTER DECEMBER 31,
2021, AND ENDING BEFORE JANUARY 1, 2023, 30% OF:
(I) THE ACTUAL AMOUNT OF EMPLOYMENT-RELATED EXPENSES
INCURRED BY THE TAXPAYER AND CLAIMED FOR THE FEDERAL TAX
CREDIT UNDER SECTION 21 OF THE INTERNAL REVENUE CODE OF
1986 DURING THE PRIOR TAXABLE YEAR, OR THE FOLLOWING, AS
APPLICABLE, WHICHEVER IS LESS:
(A) $3,000 FOR ONE QUALIFYING INDIVIDUAL WITH
RESPECT TO THE TAXPAYER; OR
(B) $6,000 FOR TWO OR MORE QUALIFYING
INDIVIDUALS WITH RESPECT TO THE TAXPAYER; MULTIPLIED
BY
(II) THE APPLICABLE PERCENT, WITH RESPECT TO THE
TAXPAYER, IN EFFECT FOR THE TAXABLE YEAR BEGINNING AFTER
DECEMBER 31, 2021, AND ENDING BEFORE JANUARY 1, 2023.
(1) (2) For the taxable year beginning after December
31, 2022 , and ending before January 1, 2024, 30% of the
actual FOLLOWING AMOUNTS, WHICHEVER IS LESS:
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(I) THE ACTUAL amount of employment-related expenses
incurred by the taxpayer and claimed for the Federal tax
credit under section 21 of the Internal Revenue Code of
1986 during the prior taxable year , or the following,
whichever is less: ; OR
(II) THE FOLLOWING AMOUNTS:
(i) (A) $3,000 for one qualifying individual
with respect to the taxpayer; or
(ii) (B) $6,000 for two or more qualifying
individuals with respect to the taxpayer.
(2) (3) For the taxable year beginning after December
31, 2023 , and ending before January 1, 2025, 35% of the
actual FOLLOWING AMOUNTS, WHICHEVER IS LESS:
(I) THE ACTUAL amount of employment-related expenses
incurred by the taxpayer and claimed for the Federal tax
credit under section 21 of the Internal Revenue Code of
1986 during the prior taxable year , or the following,
whichever is less: ; OR
(II) THE FOLLOWING AMOUNTS:
(i) (A) $3,500 for one qualifying individual
with respect to the taxpayer; or
(ii) (B) $7,000 for two or more qualifying
individuals with respect to the taxpayer.
(3) (4) For the taxable year beginning after December
31, 2024 , and ending before January 1, 2026, 40% of the
actual FOLLOWING AMOUNTS, WHICHEVER IS LESS:
(I) THE ACTUAL amount of employment-related expenses
incurred by the taxpayer and claimed for the Federal tax
credit under section 21 of the Internal Revenue Code of
1986 during the prior taxable year , or the following,
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whichever is less: ; OR
(II) THE FOLLOWING AMOUNTS:
(i) (A) $4,000 for one qualifying individual
with respect to the taxpayer; or
(ii) (B) $8,000 for two or more qualifying
individuals with respect to the taxpayer.
(4) (5) For the taxable year beginning after December
31, 2025 , and ending before January 1, 2027, 45% of the
actual FOLLOWING AMOUNTS, WHICHEVER IS LESS:
(I) THE ACTUAL amount of employment-related expenses
incurred by the taxpayer and claimed for the Federal tax
credit under section 21 of the Internal Revenue Code of
1986 during the prior taxable year , or the following,
whichever is less: ; OR
(II) THE FOLLOWING AMOUNTS:
(i) (A) $4,500 for one qualifying individual
with respect to the taxpayer; or
(ii) (B) $9,000 for two or more qualifying
individuals with respect to the taxpayer.
(5) (6) For the taxable year beginning after December
31, 2026 , and ending before January 1, 2028, FOR EACH TAXABLE
YEAR THEREAFTER, 50% of the actual FOLLOWING AMOUNTS,
WHICHEVER IS LESS:
(I) THE ACTUAL amount of employment-related expenses
incurred by the taxpayer and claimed for the Federal tax
credit under section 21 of the Internal Revenue Code of
1986 during the prior taxable year , or the following,
whichever is less: ; OR
(II) THE FOLLOWING AMOUNTS:
(i) (A) $5,000 for one qualifying individual
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with respect to the taxpayer; or
(ii) (B) $10,000 for two or more qualifying
individuals with respect to the taxpayer.
* * *
Section 2 3. This act shall take effect in 60 days.
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