What is it?
The Educational Improvement Tax Credit (EITC) provides companies with a 75% tax credit for donations to a non-profit scholarship or educational improvement organization. The tax credit increases to 90% if a commitment to making the same donations for two consecutive years is made. A business paying taxes in Pennsylvania can receive up to $750,000 in tax credits annually. EITC provides low-income children and families, who reside in Philadelphia, with much needed tuition assistance.
Modeled after the popular EITC program, the Opportunity Scholarship Tax Credit (OSTC) program provides tuition assistance to children who live within the attendance boundaries of Pennsylvania’s worst performing 15% of schools. Just like the EITC program, the OSTC program awards Pennsylvania businesses a tax credit of 75% if the gift is made for one year or 90% if the company commits to making the same donations for two consecutive years. OSTC funds are available in addition to any credits received under the EITC program.
Students: 100% of C.B. Community Schools students receive a full scholarship. As an approved scholarship organization, EITC and OSTC funding is a critical component of being able to provide these scholarships.
Businesses: The EITC and OSTC programs provide businesses with a 75% tax credit for a one-year gift and 90% tax credit if a business agrees to provide the same contribution for two consecutive years. Eligible businesses authorized to do business in Pennsylvania and subject to one or more of the following taxes may participate in the EITC/OSTC Program:
- Personal Income Tax
- Capital Stock/Foreign Franchise Tax
- Corporate Net Income Tax
- Bank Shares Tax
- Title Insurance & Trust Company Shares Tax
- Insurance Premium Tax
- Mutual Thrift Tax
- Malt Beverage Tax
- Retaliatory Fees under section 212 of the Insurance Co. Law of 1921
Individuals: Qualifying individuals and certain legal entities with a PA tax liability may be able to join a Special Purpose Entity (SPE) and make a required two-year commitment to fund scholarships.
How to Apply
Applying is easy, but there is a cap on funding, and applications are accepted on a first-come, first-serve basis.
Applications for businesses in the middle of a two-year commitment and returning donors will be accepted in May
New applications will be accepted beginning in July
You should consult with your tax advisor on how these programs may impact you and/or your business.
We would be happy to walk you through the EITC/OSTC application process. Please contact Joy Tartar at 267-766-3130 or firstname.lastname@example.org