How Do PA Educational Tax Credits Work?

Invest in Philadelphia children while lowering your state and federal tax liability through the PA Opportunity Scholarship Tax Credit (OSTC) and the PA Educational Improvement Tax Credit (EITC). Sixty-six percent of Philadelphia K-8th grade public schools are on Pennsylvania’s list of lowest-performing schools, and parents are desperate for better options for their children.

CSFP is a state-approved scholarship organization (OSTC and EITC-SO). Both businesses and individuals can utilize PA tax credits. Read below to discover how you can change the future for children.

How to participate:

2019 credits are all gone. Call us ASAP about applying for your business in 2020.

You may obtain credits for a portion or all of your tax liability. Businesses can receive up to $750,000 in tax credits per year.

Credits are first-come, first-served, and often fully utilized on opening day, so CSFP will help you apply.

Companies entering year 2 of a two-year tax credit commitment, or companies renewing a two-year commitment that just ended, must apply on May 15. Read more about renewals.

Companies can apply credits to a variety of state taxes.

There is no minimum to participate! Apply for amount of credits you need based on PA tax liability.

 


Sample Tax Credit Calculation: C Corp  

Impact26 lives impacted
Donation Amount$50,000
Tax Credit (90%)$45,000
Federal Tax Savings*$1,050
Net Cost $3,950
*21% corporate tax rate applied to net of donation and state credit

How do tax credits for individuals work?

Individuals can form a Special Purpose Entity (SPE) to get tax credit applied to personal PA taxes and help low-income children receive quality K-8th grade education.

Instead of creating their own SPE, individuals may join CSFP's fully-managed SPE, and we handle everything.

2019 credits have been fully utilized. Contact us ASAP to learn about how to get 2020 tax credits.

If you manage your own SPE (and are not a CSFP LLC member), you must apply on May 15 to reserve your 2nd year credits or ask for another two-year commitment. Read more about renewals.

Credits are approved in the fall. Then you donate to CSFP and apply the credits to that year’s personal PA taxes. Credits equal 90% of the amount donated and lower your state taxes dollar for dollar.

 


TAX CREDIT ILLUSTRATION:  MY PA STATE TAX IS $12,000* AND I AM AT 32% FEDERAL TAX RATE 

Net cost to provide 7 low-income children with a quality foundational education$906
Donation to CSFP through CSFP LLC$13,333
PA tax savings ($13,333 gift x 90% credit)$12,000
Federal tax savings ($1,333 net charitable deduction x 32% tax rate)$427

Leverage your giving: For just 7 cents on the donated dollar, you can create big change for children at little cost.

 

*The federal cap of $10K deduction for state & local taxes provides an incentive to participate in this program!

Please give us a call for more information.

Call 215-606-1874 to learn how to apply.

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