Under Pennsylvania HB 1300, the state altered its tax code to treat contributions to a Dependent Care Assistance Plan (DCAP) up to $5,000 as excluded by PA state income tax and local Earned Income Taxes (EIT). The adjustment can be found in Internal Revenue Code Section 129.
The bill retroactively changed the treatment of DCAP contributions in relation to state income tax to January 1, 2023.
Additional guidance:
- Employer Information: Dependent Care Plan (Section 129)
- Employee Information: Dependent Care Plan (Section 129)
The state also released further details on its official website.
This article is informational and does not constitute legal or financial advice. Consult with an employment lawyer or accountant for additional clarification on how these changes impact your company.
