The Pennsylvania Educational Improvement Tax Credit (EITC) gives business the opportunity to invest in tomorrow's workforce.
Frequently Asked Questions
Q: What is the Pennsylvania Educational Improvement Tax Credit?
A: The EITC was established in 2001 to provide businesses that pay PA taxes with a tax credit for their donations to nonprofit Scholarship or Education Improvement Organizations.
A one-time donation for K to 12 students can earn a 75% tax credit for a 1 year commitment or a 90% credit for a two year commitment. A one-time donation for Pre-K students can result in a 100% tax credit for the first $10,000; anda 90% tax credit for the remainder up to $100,000.
A business, or any of its operating subsidiaries, can receive up to $300,000 in tax credits annually.
Q: What Organizations utilize the Pennsylvania EITC?
A: Over 2,800 companies have benefited from the Educational Improvement Tax Credit. Although large companies participate in the program, most EITC contributors are small and mid-sized businesses.
Q: Who qualifies for the EITC?
A: To qualify for the credit, a business must pay one of the following Pennsylvania state taxes:
- Corporate Net Income Tax
- Capital Stock and Franchise Tax
- Bank and Trust Company Shares Tax
- Title Insurance Companies Shares Tax
- Insurance Premiums Tax
- Mutual Thrift Institutions Tax
S Corporations may participate in EITC as well. Businesses may elect to pass through credits from the Personal Income Tax of S Corporation Shareholders or Partners in a general or limited partnership.
These donations make a genuine difference to students and their families. But An EITC-eligible contribution to students through BLOCS offers donors advantages as well:
- Charitable donations reduce the amount of taxable income
- Tax credits reduce tax bills dollar for dollar
- Giving students the chance to experience a high-quality education is an investment in tomorrow's leaders and workforce
- Minimal cost for major impact
- Helps build community good will
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