Pennsylvania Tax Credit Programs
what is eitc?
The Educational Improvement Tax Credit (EITC) provides companies with a 75% tax credit for donations to a non-profit scholarship or educational improvement organization. The tax credit increases to 90% if a commitment to making the same donations for two consecutive years is made. A business paying taxes in Pennsylvania can receive up to $750,000 in tax credits annually. EITC provides low-income children and families, who reside in Philadelphia, with much needed tuition assistance.
what is ostc?
Modeled after the popular EITC program, the Opportunity Scholarship Tax Credit (OSTC) program provides tuition assistance to children who live within the attendance boundaries of Pennsylvania's worst performing 15% of schools. Just like the EITC program, the OSTC program awards Pennsylvania businesses a tax credit of 75% if the gift is made for one year or 90% if the company commits to making the same donations for two consecutive years. OSTC funds are available in addition to any credits received under the EITC program.
TPS distributes approximately $1.9M of tuition assistance annually to 28% of TPS families. Many of these families are in the boundaries of an underperforming school district. Thus, TPS can accept donations through either EITC or OSTC.
PRE-K EITC—A UNIQUE OPPORTUNITY
In addition to the above EITC programs, Pennsylvania offers a tax credit of 100% of the first $10,000 donated to Pre-K programs. The tax credit for additional donations is 90% up to $200,000. In contrast to the programs above, a two year commitment does not impact the amount of the credit.
TPS Preschool is a transformative year in the lives of young learners. Pre-K EITC offers a way to bring this experience to families that may not otherwise be able to afford the cost of tuition, at no cost to the business.
AVAILABLE FOR BUSINESSES OR INDIVIDUALS
EITC and OSTC are open to both businesses and individuals. Any business that pays PA taxes and any individual who pays $3,500 or more in PA state tax is eligible to participate in the program.
WHOM DO I CONTACT WITH QUESTIONS?
TPS’s cross-functional PA Tax Credit team is led by Carol Lerner, Director of Finance and Operations, who can be reached at (215) 545-5323 x 229 or at [email protected].
Information provided by representatives of The Philadelphia School (TPS) or in TPS publications is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor.