Tax Credit For Businesses That Help Employees Pay for Childcare: H.B. 1958
The childcare industry is in crisis—and lawmakers in Harrisburg are paying attention.
Recently, the Pennsylvania House passed a bill that gives businesses a tax break if they offer childcare as a benefit. The strategy is an effort to get the private sector to pour money into an industry struggling from multiple angles.
The average salary of a childcare worker in Pennsylvania is $12.43. One out of five workers in the industry are on state benefits like SNAP or Medicaid. In turn, workers are leaving the profession. Centers get short staffed. Families get put on a wait list—and parents leave the workforce.
The problem persists in rural, suburban, and urban areas— and is no respecter of time.
In the middle of a rally for childcare support at the capitol recently, one center CEO got a message from another supervisor.
“We're losing two childcare workers at a rural childcare facility in two weeks, they gave their notice because they're leaving for better paying jobs in retail,” shared Leah Spangler, President of Learning Lamp. The group has multiple centers across the state.
“We’re going to have to close that center because we are understaffed, until we can hire replacement workers. So that's a lot of families. That's 26 families that use that facility that won't have care unless I'm able to staff there very quickly,” said Spangler.
Earlier this year, Pennsylvania passed the childcare tax credit for families. Now, some lawmakers want to expand the strategy to businesses.
The Pennsylvania House passed H.B. 1958 on May 22—with bipartisan support of 155 to 47 votes.
“So employers that are helping pay for employees childcare, we'll get a tax benefit- a tax credit- for doing so,” said Rep. Liz Hanbidge (D-61), the bill’s sponsor.
With limited access to childcare because of cost and availability, a parent will stay home with their kids. In turn, there are less workers available for jobs. Hanbidge says this has lead to businesses showing interest in offering childcare as a benefit.
“They're really struggling to find workforce and they end up spending a lot of money trying to retrain workers who have to leave the workforce because of childcare issues; Or they can't get people to work with jobs because of childcare issues.”
Hanbidge estimates the tax credit would cost the state $8 million; but that the loss would be balanced as more return to the work force and pay income tax.
“[If employees pay] $500 of your childcare, [they] could get up to 30% of that. So $150. And they have to give it to every employee,” said Hanbidge. "Not just for the vice presidents and high ups. Even if you work the front desk or are boots on the ground, you must have access to the benefit."
A spokesperson with Senate leadership said the childcare industry remains one of their top priorities. There is a lean towards evolving current programs and limits- like income caps that allow families to be eligible for state support in paying childcare- before introducing new government programs.

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