Educational Improvement Tax Credit Program 

EITC is tax credits that are available to eligible businesses contributing to a Scholarship Organization, an Educational Improvement Organization, and/or a Pre-Kindergarten Scholarship Organization.

 

Uses

Tax credits may be applied against the tax liability of a business for the tax year in which the contribution was made.

 

Eligibility

Businesses authorized to do business in Pennsylvania who are subject to one or more of the following taxes:

• Personal Income Tax

• Capital Stock/Foreign Franchise Tax

• Corporate Net Income Tax

• Bank Shares Tax

• Title Insurance & Trust Company Shares Tax

• Insurance Premium Tax (excluding surplus lines, unauthorized, domestic/foreign marine)

• Mutual Thrift Tax

• Malt Beverage Tax

• Retaliatory Fees under section 212 of the Insurance Company Law of 1921

 

Funding

Through EITC, eligible businesses can receive tax credits equal to 75% of their contribution, up to $750,000 per taxable year.  The tax credit may be increased to 90% of the contribution if the business agrees to provide the same amount for two consecutive tax years. For contributions to Pre-Kindergarten Scholarship Organizations, a business may receive a tax credit equal to 100 percent of the first $10,000 contributed and up to 90 percent of the remaining amount contributed up to a maximum credit of $200,000 annually.

 

Terms

An approved company must provide proof to DCED within 90 days of the notification letter that the contribution was made within 60 days of the notification letter. Tax credits not used in the tax year the contribution was made may not be carried forward or carried back and are not refundable or transferable, except for an approved election by a pass-through entity to apply any unused tax credits to the tax liability of the owners in the taxable year immediately following the year in which the contribution is made.

 

How to Apply:
You can apply online at the PA Department of Community and Economic Development website 

 

Businesses

Pennsylvania businesses can begin applying for EITC credits through DCED’s electronic single application system. DCED will no longer require applicants to mail the signed signature page.

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The business application guide explains the process of applying. Tax credit applications will be processed on a first-come, first-served basis by day submitted. All applications received on a specific day will be processed on a random basis before moving on to the next day’s applications. Applications will be approved until the amount of available tax credits is exhausted.

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Please contact  the Library if you are interested in this program.

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