EITC & OSTC
Make your tax dollars work for the philadelphia school
Sounds too good to be true? It isn’t! With both of these programs, business can receive a 75% state tax credit or a 90% state tax credit. In addition, business owners can claim a charitable deduction for the difference between the tax credit amount and the gift. For example, if you donate $5,000 to TPS each year for two years, you receive a tax credit of $4,500 per year, plus the ability to claim $500 as a charitable deduction. You can donate any amount up to $750,000.
The Educational Improvement Tax Credit program (EITC) allows qualified businesses to fulfill their state tax burden while supporting financial aid at TPS. The Opportunity Scholarship Tax Credit program (OSTC) allows qualified businesses to fulfill their state tax burden while supporting low-income students who reside in low-achieving school districts in Pennsylvania. EITC supports the TPS financial aid budget; OSTC supports a specific child in need of resources to attend TPS.
Is my business eligible?
If your business is authorized to operate in Pennsylvania and pays one of the following taxes, you can register to be eligible for the Pennsylvania Educational Improvement Tax Credit Program (EITC) and the Pennsylvania Opportunity Tax Credit (OSTC).
- Corporate Net Income Tax
- Capital Stock Franchise Tax
- Bank and Trust Company Share Tax
- Title Insurance Companies Share Tax
- Insurance Premiums Tax
- Mutual Thrift Institutions Tax
- Personal Tax of S corporation shareholders or Partnership partners
How can my business register?
The one-page application is now available on-line from the Pennsylvania Department of Community and Economic Development here. The website provides further information on the program as well as the application form (EITC Business Guidelines). Additionally, you can call the Department of Community and Economic Development at (717) 787-7120 for a copy of the application.
Pennsylvania businesses can begin applying for Opportunity Scholarship Tax Credits through DCED’s electronic single application system, found here. 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.
What is the 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 the company commits to making the same donations for two consecutive years. A business paying taxes in Pennsylvania can receive up to $300,000 in tax credits annually. EITC provides low-income children and families, who reside in Philadelphia, with much needed tuition assistance. Help to make a TPS education possible for more Philadelphia families!
What is the ostc?
Modeled after the popular EITC program, the Opportunity Scholarship Tax Credit (OSTC) program provides financial aid support to children who live within the attendance boundaries of Pennsylvania's worst performing 15% of schools. Unfortunately, there are over 150 such schools in the city of Philadelphia alone. 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. If you qualify for EITC, you also qualify for OSTC. The Philadelphia School is an approved scholarship organization for OSTC.
important additional information
Once a business is eligible, the business has sixty (60) days to make its contribution to The Philadelphia School. 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 is not refundable or transferable.