Active 2026 State Tax Credit
Pennsylvania Child Care Tax Credit & Keystone Stack
Pennsylvania's Act 56 (2024) provides a 30% employer tax credit on qualified child care expenditures, effective 2025. Combined with the Federal 45F Credit and 6 regional ELRCs, Pennsylvania is a strong state for employer-sponsored child care.
2026
Program Year
Active
Program Status
45F
Federal Credit Available
All
Employers Eligible
βοΈ How the Cost Split Works
Employer Pays
~33%
of total tuition
Pennsylvania Pays
~33%
state match
Parent Pays
~33%
of total tuition
π The Pennsylvania Savings Stack
Stack available Pennsylvania programs with the Federal 45F Tax Credit for maximum employer savings.
| Benefit Layer | Small Business (<$32M) | Large Business |
|---|---|---|
| State Program Benefit | Varies by program | Varies by program |
| Federal 45F Credit (2026) | 50% Tax Credit | 40% Tax Credit |
| Net Employer Cost | Significantly Reduced | Significantly Reduced |
π° Real-World Employer Savings
| Cost Component | Without Program | With State + 45F Stack |
|---|---|---|
| Annual child care cost (per employee) | $12,000 | $12,000 |
| State Program Benefit | $0 | Varies |
| Employee Share | $0 | Reduced |
| Employer Share | $12,000 | Reduced |
| Federal 45F Credit (50% of employer share) | $0 | Significant savings |
| Net Employer Cost | $12,000 | Significantly Lower |
π Employer Child Care Tax Credits & Programs
π‘ Federal Tax Credit Available: All U.S. employers qualify for the Federal Section 45F Employer Child Care Tax Credit β up to $600,000/year for small businesses under the 2026 OBBBA expansion. Stack this with your state program for maximum savings.
Pennsylvania HB 1745 Employer Tax Credit
State Tax Credit
30% of employer contributions
Eligibility: All Pennsylvania employers with qualifying child care expenses
Pennsylvania Child Care Works (CCW)
State Subsidy
Sliding-scale co-pay based on income
Eligibility: Families at or below 200% FPL
Federal Section 45F Credit
Federal Tax Credit
Up to 50% of employer costs (max $600K/yr)
Eligibility: All U.S. employers with qualifying child care expenses
Keystone STARS Quality Rating
State Program
Quality ratings for child care providers
Eligibility: Licensed Pennsylvania child care providers
Duo-Share (Employer + Employee)
Employer Benefit
Flexible split β employer covers 25β75%
Eligibility: Any Pennsylvania employer, no state program required
Ready to Launch a Tri-Share Program?
Get a free, personalized consultation to calculate your exact savings and start the setup process.
Request Your Free Consultation βπ Geographic Coverage
Major Cities Served
County Coverage
All 67 Pennsylvania counties are served through 6 regional ELRCs. Contact your regional ELRC for Act 56 employer tax credit enrollment.
β Pennsylvania Tri-Share Child Care: Frequently Asked Questions
HB 1745 created a 30% employer tax credit on contributions toward employee child care costs. This credit can be stacked with the Federal Section 45F Credit for up to 80% combined savings.
Yes β Pennsylvania employers can stack the HB 1745 state credit (30%) with the Federal Section 45F Credit (up to 50%). Together, these credits can offset up to 80% of employer child care contributions.
Philadelphia, Pittsburgh, Allentown, and Erie have the highest employer participation rates. The HB 1745 credit is available statewide to all Pennsylvania employers.
Pennsylvania does not have a formal Tri-Share program. However, HB 1745 creates a strong employer incentive. We recommend a Duo-Share model β contact us for a free consultation.
Pennsylvania's Child Care Works (CCW) program serves families at or below 200% of the Federal Poverty Level (FPL). Contact Pennsylvania DHS for current income thresholds.
Keystone STARS is Pennsylvania's quality rating and improvement system for child care providers. Higher-rated providers receive additional funding and are preferred partners for employer child care programs.
Contact the Pennsylvania Department of Revenue at revenue.pa.gov for guidance on claiming HB 1745 credits.
π References & Sources
Last Updated: June 5, 2026