Two state tax credit programs can help Pennsylvania employers provide financial support to their employees for child care, education, and disability-related expenses.
The first program – the Employer Child Care Contribution Tax Credit – supports employers who contribute to child care or early learning programs on behalf of their employees. Employers may receive a tax credit equal to 30 percent of eligible child care contributions, up to a maximum of $500 per employee annually.
The second program – the 529 Savings Account Employer Matching Contribution Tax Credit – provides a tax credit to employers who offer matching contributions to an employee’s PA 529 or PA ABLE account. The PA 529 program offers a tax-advantaged way for families to save for education expenses, from K–12 through college and career training. The PA ABLE program allows individuals with qualifying disabilities to save or invest in a tax-advantaged account without affecting their government benefits.
Under this program, employers can receive a tax credit equal to 25 percent of their matching contributions, up to a maximum of $500 per employee annually.
To qualify for either program, employers must:
- Be a Pennsylvania business subject to state taxes, such as Personal Income Tax or Corporate Net Income Tax
- Employ at least one individual and withhold PA income tax from wages
- Offer the benefit to all employees
- Maintain basic documentation, including proof of contributions and signed opt-in/opt-out forms
- Be in good standing with state tax obligations
How to Apply
Employers interested in either tax credit must maintain records – such as bank statements and provider receipts – to verify their contributions.
Applications are submitted through myPATH, the Pennsylvania Department of Revenue’s online tax system. Employers seeking to claim the credit for the 2026 calendar year must apply between October 1, 2026, and January 31, 2027.
After logging into myPATH, applicants should navigate to the “Applications” tile and select the appropriate program. The system will then guide users through the step-by-step application process.