Cephas, Hanbidge introduce legislation to upgrade Employer Child Care Contribution Tax Credit
Rep. Liz Hanbidge August 27, 2026 | 11:33 AM
HARRISBURG, August 26 – State Reps. Morgan Cephas, D-Phila., and Liz Hanbidge, D-Montgomery, introduced H.B. 2748, legislation to help make childcare more affordable for Pennsylvanian families.
The Employer Child Care Contribution Tax Credit was established by Cephas and Hanbidge’s previous legislation, H.B. 1958, in 2024. That same year, the national average cost of childcare rose to $13,128 per year, according to a report from Child Care Aware of America.
House Bill 2748 provides an incentive for more Pennsylvania businesses to participate in the Employer Child Care Contribution Tax Credit. This bill would increase the tax credit amount that employers can receive from 30% to 100% of their employees’ eligible childcare costs. It also would raise the employer’s annual contribution limit from $500 to $10,000 per employee and increase the maximum tax credit that can be awarded annually to employers from $150 per employee to $10,000. Total tax credits would be capped at $10 million each year.
“Our tax incentive helped working families, but as the cost of childcare continues to rise, we must adjust it,” Cephas said. “This upgraded tax credit will encourage more businesses to participate in this program. By encouraging more employers to provide financial support for employee childcare expenses, this legislation is an important step toward making childcare more affordable for families across the commonwealth.
“Furthermore, working parents who know that their children are in safe and quality care can better concentrate on their day-to-day work and overall careers. This creates a more stable workforce in Pennsylvania while continuing to help families re-enter the job market.”
"Childcare costs are placing an enormous strain on Pennsylvania families, and we need to do more to make quality care affordable and accessible,” Hanbidge said. “By expanding the Employer Child Care Contribution Tax Credit, we can give businesses a stronger incentive to help their employees cover these costs while putting more money back in the pockets of working families. This legislation builds on our previous efforts and is a step toward making childcare more affordable across Pennsylvania.”
House Bill 2748 was referred to the House Finance Committee for consideration.