PRINTER'S NO. 2596
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1958
Session of
2024
INTRODUCED BY HANBIDGE, CEPHAS, SAMUELSON, RABB, SCHLOSSBERG,
MERSKI, MADSEN, KHAN, PARKER, DONAHUE, T. DAVIS, DELLOSO,
GUENST, SANCHEZ, HOWARD, FREEMAN, HILL-EVANS, CERRATO,
CONKLIN, CIRESI, FLEMING, DALEY AND SHUSTERMAN,
FEBRUARY 20, 2024
REFERRED TO COMMITTEE ON FINANCE, FEBRUARY 20, 2024
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," providing for employer child care contribution
tax deduction.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, is amended by adding an article to
read:
ARTICLE XIX-J
EMPLOYER CHILD CARE CONTRIBUTION TAX DEDUCTION
Section 1901-J. Scope of article.
This article establishes the Employer Child Care Contribution
Tax Deduction.
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Section 1902-J. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Aggregate contribution." The aggregate contribution that a
qualified taxpayer makes to all employees during a taxable year.
"Child-care provider." Includes:
(1) A child care center as defined under 55 Pa. Code §
3270.4 (relating to definitions).
(2) A group child care home as defined under 55 Pa. Code
§ 3280.4 (relating to definitions).
(3) A family child care home as defined under 55 Pa.
Code § 3290.4 (relating to definitions).
"Contribution." A payment made to a child-care provider by
an employer to subsidize an employee's eligible child-care
costs.
"Department." The Department of Revenue of the Commonwealth.
"Eligible child-care costs." Costs incurred by an employee
for services rendered by a child-care provider that are incurred
to enable the employee to be gainfully employed by a qualified
taxpayer.
"Employee." An individual employed by a qualified taxpayer
whose job is located within this Commonwealth. The term shall
not include:
(1) A shareholder, partner or member of an entity
subject to tax under Article III.
(2) An individual operating as a sole proprietor.
(3) An officer of an entity subject to tax under Article
IV, VI, VII, VIII or XV.
"Qualified taxpayer." A business, partnership, association,
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corporation, governmental body or unit or agency or other entity
that:
(1) is subject to a tax imposed under Article III, IV,
VI, VII, VIII, IX, XI or XV; and
(2) is required under the Internal Revenue Code of 1986
(26 U.S.C. § 1 et seq.) to withhold Federal income tax from
wages paid to an employee.
"Taxable income." A qualified taxpayer's taxable income
under Article III, IV, VI, VII, VIII, IX, XI or XV.
Section 1903-J. Employer child care contribution tax deduction.
(a) General rule.--Notwithstanding any other provision of
law, a qualified taxpayer shall be allowed a deduction from the
qualified taxpayer's taxable income equal to 110% of the
qualified taxpayer's aggregate contribution. This deduction
shall be in addition to any tax credit or deduction to which a
qualified taxpayer or an employee is entitled under this act.
(b) Limitation.--The deduction shall not result in the
qualified taxpayer's taxable income being less than zero.
(c) Form.--The department shall establish and make available
a form which a qualified taxpayer seeking to claim the employer
child care contribution tax deduction must complete and file
along with the qualified taxpayer's tax return. The form shall
require the qualified taxpayer to provide the following:
(1) The names, addresses and Social Security numbers of
all employees to which the qualified taxpayer made a
contribution during the taxable year.
(2) The names, addresses and employer identification
numbers of the child-care providers that provided child-care
services to each participating employee.
(3) The amount contributed to each participating
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employee.
Section 1904-J. Exclusion from classes of income.
Notwithstanding any other provision of law, up to $5,000 of
the amount paid or incurred by a qualified taxpayer for an
employee's eligible child-care costs during the taxable year may
not be included in any of the classes of income enumerated under
section 303.
Section 1905-J. Regulations.
(a) Promulgation.--The department shall promulgate
regulations to implement the provisions of this article.
(b) Guidelines.--The department shall develop written
guidelines for the implementation of this article. The
guidelines shall be in effect until the department promulgates
regulations for the implementation of the provisions of this
article.
Section 1906-J. Applicability.
The provisions of this article shall apply to taxable years
beginning after December 31, 2023.
Section 2. This act shall take effect in 60 days.
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