PRIOR PRINTER'S NO. 694 PRINTER'S NO. 3298
No. 656 Session of 1999
INTRODUCED BY E. Z. TAYLOR, S. MILLER, MAJOR, ROSS, GORDNER,
CAPPABIANCA, LUCYK, LAUGHLIN, TANGRETTI, GRUCELA, BEBKO-
JONES, MICOZZIE, GEORGE, HENNESSEY, THOMAS, BELARDI,
PHILLIPS, McCALL, SCRIMENTI, SCHULER, YOUNGBLOOD, MARKOSEK,
SANTONI, GEIST, SHANER, MASLAND, ZUG, NAILOR, MELIO, HARHART,
FLICK, BLAUM, TRAVAGLIO, FICHTER, BELFANTI, DeLUCA, STAIRS,
MUNDY, BARRAR, FREEMAN, MARSICO, HERMAN, CLARK, SEYFERT,
FEESE, SURRA, FORCIER, TRELLO, DALEY, ARMSTRONG, TULLI,
CAWLEY, WALKO, BAKER, READSHAW, SAINATO, STABACK, RAYMOND,
WOJNAROSKI, RUFFING, SOLOBAY, BARD, HUTCHINSON, JOSEPHS,
BENNINGHOFF, HARHAI, ROONEY, SERAFINI, PLATTS, KENNEY,
LEDERER, DALLY, SCHRODER, PETRARCA, HORSEY, SEMMEL, JAMES,
ADOLPH, McGILL, RUBLEY, SAYLOR, MYERS, MANN, CURRY, CORRIGAN,
HESS, GLADECK, L. I. COHEN, LEVDANSKY, STEELMAN, STEIL,
CIVERA, COSTA, YEWCIC, RAMOS, WASHINGTON, MAHER, WILLIAMS AND
COLAFELLA, MARCH 2, 1999
AS REPORTED FROM COMMITTEE ON FINANCE, HOUSE OF REPRESENTATIVES,
AS AMENDED, APRIL 10, 2000
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," providing for an exclusion from the Pennsylvania <--
11 personal income tax of earnings expended for child care. A <--
12 CHILD AND DEPENDENT CARE TAX CREDIT.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Section 303(a)(1) of the act of March 4, 1971 <--
1 (P.L.6, No.2), known as the Tax Reform Code of 1971, amended
2 March 13, 1974 (P.L.179, No.32), is amended to read:
3 Section 303. Classes of Income.--(a) The classes of income
4 referred to above are as follows:
5 (1) Compensation. All salaries, wages, commissions, bonuses
6 and incentive payments whether based on profits or otherwise,
7 fees, tips and similar remuneration received for services
8 rendered whether directly or through an agent and whether in
9 cash or in property except income derived from the United States
10 Government for active duty outside the Commonwealth of
11 Pennsylvania as a member of its armed forces. Notwithstanding
12 the foregoing, an amount equal to any reasonable and necessary
13 expenses incurred by a person legally responsible for the care
14 of any children, for the care of those children during any
15 period of time the person is engaged in performing services in
16 connection with the person's employment, whether the care be in-
17 home or at any licensed Pennsylvania child care facility, shall
18 be excluded from income taxed as compensation.
19 * * *
20 SECTION 1. SECTION 301 OF THE ACT OF MARCH 4, 1971 (P.L.6, <--
21 NO.2), KNOWN AS THE TAX REFORM CODE OF 1971, IS AMENDED BY
22 ADDING A SUBSECTION TO READ:
23 SECTION 301. DEFINITIONS.--THE FOLLOWING WORDS, TERMS AND
24 PHRASES WHEN USED IN THIS ARTICLE SHALL HAVE THE MEANING
25 ASCRIBED TO THEM IN THIS SECTION EXCEPT WHERE THE CONTEXT
26 CLEARLY INDICATES A DIFFERENT MEANING. UNLESS SPECIFICALLY
27 PROVIDED OTHERWISE, ANY REFERENCE IN THIS ARTICLE TO THE
28 INTERNAL REVENUE CODE SHALL INCLUDE THE INTERNAL REVENUE CODE OF
29 1986 (PUBLIC LAW 99-514, 26 U.S.C. § 1 ET SEQ.), AS AMENDED TO
30 JANUARY 1, 1997:
19990H0656B3298 - 2 -
1 * * *
2 (C.1A) "CHILD AND DEPENDENT CARE EXPENSES" MEANS THE TOTAL
3 OF THE AMOUNTS CALCULATED UNDER SUBCLAUSES (I) AND (II) AS
4 FOLLOWS:
5 (I) UNREIMBURSED EMPLOYMENT-RELATED EXPENSES THAT ARE USED
6 IN CALCULATING THE FEDERAL CHILD AND DEPENDENT CARE CREDIT UNDER
7 SECTION 21 OF THE INTERNAL REVENUE CODE OF 1986 (PUBLIC LAW 99-
8 514, 26 U.S.C. § 1 ET SEQ.), WITHOUT REGARD TO THE LIMITATIONS
9 IN SECTION 21(C) OF THE INTERNAL REVENUE CODE OF 1986.
10 (II) AMOUNTS DEEMED TO BE UNREIMBURSED CHILD AND DEPENDENT
11 CARE EXPENSES FOR QUALIFIED INDIVIDUALS DESCRIBED IN SECTION
12 21(B)(1) OF THE INTERNAL REVENUE CODE OF 1986: PROVIDED, THAT
13 THE AMOUNT DEEMED TO BE UNREIMBURSED CHILD AND DEPENDENT CARE
14 EXPENSES SHALL BE EQUAL TO ONE HUNDRED FIFTY DOLLARS ($150) PER
15 MONTH FOR EACH QUALIFIED INDIVIDUAL, REDUCED BY ANY CHILD AND
16 DEPENDENT CARE EXPENSES INCLUDED IN CALCULATING THE AMOUNT UNDER
17 SUBCLAUSE (I).
18 * * *
19 SECTION 2. THE ACT IS AMENDED BY ADDING A SECTION TO READ:
20 SECTION 314.1. CHILD AND DEPENDENT CARE TAX CREDIT.--(A) A
21 TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX DUE UNDER
22 THIS ARTICLE FOR CHILD AND DEPENDENT CARE EXPENSES AS CALCULATED
23 UNDER THIS SECTION.
24 (B) THE CREDIT SHALL BE EQUAL TO THE CHILD AND DEPENDENT
25 CARE EXPENSES INCURRED BY THE TAXPAYER OR THE TAXPAYER'S SPOUSE
26 MULTIPLIED BY THE RATE OF TAX SPECIFIED IN SECTION 302.
27 (C) THE CREDIT PROVIDED BY THIS SECTION SHALL NOT EXCEED THE
28 AMOUNT OF TAX OTHERWISE DUE UNDER THIS ARTICLE.
29 Section 2. The amendment of section 303(a)(1) of the 3. THIS <--
30 act shall apply to tax years beginning on or after January 1,
19990H0656B3298 - 3 -
1 2000.
2 Section 3 4. This act shall take effect immediately. <--
A27L72DMS/19990H0656B3298 - 4 -