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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 $200,000 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 will apply to DCED for the tax credit. If the scholarship
organization is listed with the department and there is money available
in the program (there is a $44,666,667 dollar annual cap on the
program), tax credits will be awarded on a first-come, first-served
basis.
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