What are Educational Improvement Tax Credits?
A tax credit for businesses that make a donation to a scholarship organization(s). Scholarship organizations will award scholarships to children across Pennsylvania to assist them in attending the schools of their choice.
What businesses qualify?
Businesses in Pennsylvania that pay any of the following taxes: Corporate Net Income Tax; Capital Stock and Franchise Tax; Bank and Trust Company Shares Tax; Title Insurance Companies Shares Tax; Insurance Premiums Tax; and the Mutual Thrift Institutions Tax.
How much of a tax credit can I get for my business?
The tax credit is a 75% credit (against taxes owed). However, if a company provides a written two-year commitment of equal funding, the credit becomes 90% (existing charitable deductions still apply with this credit, increasing the value of the tax credit). Eligible companies may take up to $300,000 in tax credits per year.
What scholarship organizations can businesses contribute to in order to receive the credit?
Organizations eligible to receive EITC contributions must be a recognized 501(c)(3) and distribute at least 80% of their annual receipts to eligible students. Additionally, they must register with the Department of Community and Economic Development (DCED) and be listed (put on a list of eligible organizations)
How do businesses know which scholarship organizations are listed?
It is available on DCED’s web site, www.inventpa.com
Can businesses contribute to more than one scholarship organization?
Yes. Businesses can donate to as many scholarship organizations as they choose.
What is the process for businesses to receive the tax credit?
Businesses apply starting July 1, 2010. All credits are issued on a first-come, first-served basis and will be fully utilized by mid-July 2010.
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