Corporate Application for Educational Improvement Tax Credit (EITC) (K-12) - a simple, one page application

Corporate Application for Pre-Kindergarten Educational Improvement Tax Credit (Pre-K EITC) - a simple, one page application

For complete instructions and assistance, businesses may contact Christina DiMichele, BLOCS Associate Director, at (215) 587-0590 or cdimiche@adphila.org.

Frequently Asked Questions
A Guide for the Business Community

What are Educational Improvement Tax Credits (EITC)?

A tax credit for businesses that make a donation to a K-12 scholarship organization. Scholarship organizations will award scholarships to children across Pennsylvania to assist them in attending the schools of their choice.

What businesses qualify?

Any businesses that are paying any of the following Pennsylvania business taxes are eligible: Corporate Net Income Tax; Capital Stock and Franchise Tax; Bank and Trust Company Shares Tax; Alternative Bank and Trust Company Shares Tax; Title Insurance Companies Shares Tax; Alternative Title Insurance Companies Shares Tax; Insurance Premiums Tax; and the Mutual Thrift Institutions Tax.

How much of a tax credit can I get for my business?

K-12 Guidelines:
For donations to K-12 scholarship organizations, the tax credit is a 75% credit (against taxes owed). However, if a business provides a written two-year commitment of equal funding, the tax credit becomes 90%. Tax credits may not exceed $200,000 annually per business for donations made to K-12 scholarship organizations. (There is a $26,666,666 annual cap on the total amount of tax credits available for donations to K-12 scholarship organizations.)

Sample computations for "C" corporations participating in the Educational Improvement Tax Credit (K-12)

Pre-K Guidelines:
Act 48 of 2003 (the Act) amends the Educational Improvement Tax Credit program to provide for the establishment of the Pre-Kindergarten Tax Credit (PKTC) to be administered by the Department of Community and Economic Development (the Department). Act 48 authorizes the award of tax credits to businesses that make contributions to pre-kindergarten scholarship organizations determined by the Department to meet the requirements of the Act. A business may receive a tax credit equal to 100% of the first $10,000 contributed to a pre-kindergarten scholarship organization during the taxable year, and may receive a tax credit equal to 90% of any additional amount contributed during the taxable year, up to a maximum of $100,000 per taxable year.

Sample computations for "C" corporations participating in the Educational Improvement Tax Credit (Pre-Kindergarten PKTC)

What scholarship organizations can businesses contribute to in order to receive the credit?

Organizations eligible to receive EITC contributions must be a recognized 501(c)(3) and distribute at least 80% of their annual receipts to eligible students. Additionally, they must register with the Department of Community and Economic Development (DCED) and be placed on a list of eligible Scholarship Organizations.

Business Leadership Organized for Catholic Schools (BLOCS) is an approved Scholarship Organization participating in the EITC program. When businesses make a donation to BLOCS through the EITC program, they may restrict that donation to a specific school of their choice. The schools include: Archdiocesan high schools and special education schools, parish elementary schools and private Catholic schools within the Archdiocese.

DCED posts the list of eligible Scholarship Organizations on its web site (newpa.com).

Can businesses contribute to more than one scholarship organization?

Yes. Businesses may donate to as many scholarship organizations as they choose.

What is the process for businesses to receive the tax credit?

Businesses apply to DCED for the tax credit (see applications above). If the scholarship fund is registered with the department and there is money available in the program, tax credits will be awarded on a first-come, first-served basis.

After approval, businesses must make their contributions within 60 days.