Pennsylvania Form PA-40 Schedule DC – Child and Dependent Care Enhancement Credit (2026)
Last reviewed: 2025-11-09
Use the Pennsylvania Tax Form Calculator Pennsylvania Form PA-40 Schedule DC – Child and Dependent Care Enhancement Credit as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 Pennsylvania state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.
Schedule DC allows Pennsylvania taxpayers to claim the Child and Dependent Care Enhancement Credit, a refundable state credit equal to 30% of the federal credit claimed on IRS Form 2441. This program helps working families offset child care costs for dependents under age 13 or disabled dependents who require care while the taxpayer works or looks for work.
To qualify, you must have claimed a federal child and dependent care credit and have Pennsylvania taxable income. Both full-year and part-year residents may claim the credit if the qualifying expenses occurred while living in Pennsylvania.
How the Pennsylvania Credit Works
Pennsylvania mirrors the federal definition of eligible dependents and qualified expenses but applies a flat 30% rate. This means:
- If you claimed a $1,000 federal child and dependent care credit, your PA credit is $300.
- For one dependent, the maximum qualifying expense is $3,000; for two or more dependents, $6,000.
- The credit is refundable — you receive the full amount even if you owe no Pennsylvania income tax.
Enter the resulting credit on PA-40 Line 23 and attach this schedule when filing.
| SECTION I — QUALIFYING INFORMATION | ||
| 1 | Number of qualifying dependents (from federal Form 2441) | |
| 2 | Total qualified care expenses (from federal Form 2441, Line 3) | |
| 3 | Federal Child and Dependent Care Credit (from IRS Form 2441, Line 11) | |
| SECTION II — PENNSYLVANIA ENHANCEMENT CREDIT COMPUTATION | ||
| 4 | PA enhancement rate (30% of federal credit) | |
| 5 | PA Child and Dependent Care Enhancement Credit (Line 3 × 30%) | |
| 6 | Enter on PA-40 Line 23 (Total Other Credits) | |
Example Scenarios
Example 1 – Single Parent: Jamie pays $4,000 in child care for one dependent and qualifies for a $1,200 federal credit. Pennsylvania provides an additional $360 (30% × $1,200) as a refundable enhancement credit.
Example 2 – Married Couple: Two working parents pay $6,000 for care of two children and claim a $2,000 federal credit. Pennsylvania adds $600 to their state refund, reducing net state tax owed or increasing overpayment.
This credit ensures parity between federal and state assistance programs and recognizes the cost of child care in maintaining household employment.
Last reviewed: 2025-11-09: If you believe this form requires an update, please contact us.
Further Guidance and Related Forms
- Form PA-40 – Individual Income Tax Return
- Schedule OC – Other Credits
- Pennsylvania Department of Revenue – Personal Income Tax Forms
Pennsylvania’s Child and Dependent Care Enhancement Credit provides direct, refundable relief for working families and aligns state policy with federal support to encourage workforce participation and child care accessibility.
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Frequently Asked Questions
What is Form PA-40?
Form PA-40 is the Pennsylvania Individual Income Tax Return used by residents, part-year residents, and nonresidents to report taxable income and claim credits or deductions.
Can I amend to claim a refund?
Yes, if withholding or estimated payments exceeded revised liability.
Does PA tax long-term capital gains?
Yes—PA taxes “net gains from the sale, exchange, or disposition of property.” This wage page doesn’t include capital gains; model them with Schedule D.
What rate does Pennsylvania use?
Pennsylvania has a flat personal income tax rate of 3.07 % for all taxable income.
Where do I enter the exclusion amount?
You do not enter it separately; if fully excluded, you simply omit the gain from your PA-40. Partial exclusions must be shown on Schedule 19.
Important Notes
All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.