Tax credits for scholarships in PA
These programs allow companies to provide school choice scholarsips for eligible students INSTEAD OF PAYING INCOME TAXES otherwise owed to PA.
Educational Improvement Tax Credit Program (EITC) and Opportunity Scholarship Tax Credit Program (OSTC)
Both EITC and OSTC programs provide incentives to certain corporations and pass-through entities to make donations to qualified schools through state approved scholarship organizations. For many years, it was open only to C Corporations or to S Corporations; however, in the last couple of years it has been expanded to pass-through entities, including partnerships and Limited Liability Companies.
The program works like this:
* Entity makes a commitment to what is called a Scholarship Organization.
* The commitment is for one or two years
* If it’s a one-year commitment, 75% of the amount is offset against Pennsylvania taxes – for partnerships, it would be the partner’s PA income tax from ANY source – interest, dividends, salary, etc.
* If the commitment is for two years, 90% is offset against the PA taxes
* The contribution may also be deductible for Federal tax as a charitable contribution (depends on individual taxpayer circumstances.)
* The tax credits may be applied against the PA tax liability of a business (or shareholders of pass-through organizations) for the tax year in which the contribution is made.
* Tax credits that are not used in the tax year in which the contribution is made cannot be carried back to a prior year, nor carried forward to a subsequent year.
* The credits are neither refundable nor transferable.
For more information or assistance with the application process, please call Cindi McCall at (412) 466-1919 or email firstname.lastname@example.org
Roughly 85% of our students are eligible for some level of support through this program. On their behalf, I thank you for helping them be part of our winning team!
Mrs. Cindi McCall, Executive Director