Tax Credits
Learn how you can turn up to 90% of your tax liability into scholarships for Philadelphia students.
What Are PA Educational Tax Credits?
Pennsylvania’s Opportunity Scholarship Tax Credit (OSTC) and Educational Improvement Tax Credit (EITC) programs enable donors to transform their tax dollars into scholarships for kids who are eager to learn at safe, quality tuition-based schools.
For a small out-of-pocket cost, donors enjoy dollar-for-dollar PA tax credits of 90% on their contributions, plus the opportunity for a small federal deduction.
Who Is Eligible?
Businesses
Owners/Shareholders
Individuals/Households
Jordan
Your Contributions =
Their Success
PA Tax Credit Calculator
PA Tax Credit Calculator
Tax Credit Informational Video
Why Invest In CSFP?
With 24 years of experience and multiple four-star ratings from Charity Navigator, CSFP provides scholarships for under-resourced children to attend tuition-based K-8th grade schools.
Through your support, our proven and consistent program can continue to serve those most in need through scholarships awarded by a lottery. Your contributions allow our random and need-based selection process to help up to three children per family find suitable schools.
Educational Tax Credits For Businesses
Sample Tax Credit Calculation
Personal Contribution | |
|---|---|
Donate | $5,000 |
Tax Credit (90%) | $4,500 |
Federal Savings
(using the average marginal rate of CSFP donors) | $120 |
Net Cost to Donors | $380 |
2 lives transformed through scholarships!
Business Contribution | |
|---|---|
Donate | $20,000 |
Tax Credit (90%) | $18,000 |
Federal Savings
(using the 21% corporate tax rate) | $420 |
Net Cost to Donors | $1,580 |
8 lives transformed through scholarships!
Educational Tax Credits For Individuals
Here’s how tax credits work for individuals:
Frequently Asked Questions
Do all donors receive 90% of their donations in PA tax credits?
EITC/OSTC donors will receive a 90% PA tax credit should they commit to a 2-year pledge. One-time donations are subject to a reduced 75% tax credit. Some one-time donations made through CSFP’s Special Purpose Entities (SPEs) benefit from the 90% credit – consult CSFP to learn more.
What payment methods are accepted?
CSFP accepts checks, ACH/Electronic Funds Transfer (EFT), wire transfer, and appreciated securities held for one year or more.
Who can participate?
Both corporations and individuals who pay Pennsylvania income tax can participate. Individuals must participate through a state-approved LLC known as a Special Purpose Entity (SPE), whereas businesses can either apply directly through the state or join an SPE. Children’s Scholarship Fund Philadelphia (CSFP) manages SPEs to provide additional resources for scholarships.
What is an SPE?
A Special Purpose Entity (SPE) is a limited liability company (LLC) that exists solely for the purpose of facilitating contributions through the PA EITC/OSTC program. Individuals and/or companies sign a membership agreement and make their contribution to the SPE, which allows them to contribute and receive a 90% state tax credit in return. All proceeds collected from the LLC are then given to the appropriate state-approved scholarship organization to distribute through its scholarship program. Donors interested in joining a CSFP SPE should contact donorservices@csfphiladelphia.org.
What’s the difference between a tax credit and a tax deduction?
Tax Credit: Directly reduces your tax bill. An annual $10,000 EITC/OSTC contribution to an approved scholarship program like CSFP through this program for two years yields a $9,000 PA state tax credit annually.
Tax Deduction: Lowers your taxable income. The remaining 10% of your donation that is not offset by tax credits may be claimed as a charitable deduction on your federal return.
EITC vs. OSTC – What’s the difference?
EITC supports scholarships for income-eligible students statewide.
OSTC specifically supports income- eligible students who live within the attendance boundaries of Pennsylvania’s low-achieving public schools. A low-achieving school is defined as a public elementary or secondary school ranking in the bottom 15 percent of their designation as an elementary or secondary school based upon combined math and reading Pennsylvania System of School Assessment (PSSA) scores. An OSTC-eligible student can receive EITC-funded or OSTC-funded scholarships.
Can a business or individual support a specific scholarship organization?
Yes. Donors can direct their approved contribution to an eligible scholarship organization of their choice, provided that organization is approved by the state. Children’s Scholarship Fund Philadelphia is an eligible scholarship organization approved by the state of Pennsylvania.
How does my EITC/OSTC donation impact my annual tax returns?
By the first business week of March in the new year, CSFP will send you all forms needed to file your taxes on time. Generally, donors receive a state K-1 form that lists your 90% PA tax credit and is used to complete your PA return and federal deduction if you itemize. If you do not itemize federally, you benefit from the standard deduction.