What is EITC?
EITC is a program for Pennsylvania businesses which allows them to redirect a portion or all of their PA state tax dollars to a qualified organization of choice, like Rhema Christian School!
Who Benefits from EITC?
Students in Preschool through 8th grade can receive scholarship dollars via the EITC program. This lowers the overall cost of education and provides educational opportunities to some families that otherwise wouldn't be able to attend.
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“EITC and OSTC are great ways to support Rhema Christian School. Instead of paying my tax dollars to the State of Pennsylvania, the programs allow me to give the money to Rhema instead, where I know it will be used to support our financial aid program. – Rhema Christian School Business Parent & supporter of EITC & OSTC
Does the above sound too good to be true? It isn’t! With both of these Pennsylvania tax credit programs, qualifying businesses can receive up a 90% state tax credit on their contribution. In addition, business owners can claim a charitable deduction on their federal taxes, for the entire amount of the contribution. For example, if you donate $5,000 to Rhema each year for two years, you receive a tax credit of $4,500 per year, plus the ability to claim the $5,000 as a charitable deduction on your federal tax filing. A business can apply up to the maximum credit level of $750,000.
The Educational Improvement Tax Credit program (EITC) allows qualified businesses to fulfill their state tax burden while supporting financial aid at Rhema. The Opportunity Scholarship Tax Credit program (OSTC) allows qualified businesses to fulfill their state tax burden while supporting low-income students who reside in the identified low-achieving schools of Pennsylvania.
IS MY BUSINESS ELIGIBLE?
If your business is authorized to operate in Pennsylvania and pays one of the following taxes, you are eligible to participate in the Pennsylvania Educational Improvement Tax Credit Program (EITC) and the Pennsylvania Opportunity Tax Credit (OSTC).
- 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
HOW CAN MY BUSINESS REGISTER?
Pennsylvania businesses can begin applying for EITC credits through DCED’s electronic single application system.
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 are exhausted.