Educational Improvement Tax Credit (EITC)
How Can Your Company Help OMPH School with “Free” Money!
It sounds too good to be true, but it is! If you own a business, you may qualify for a tax credit and benefit Catholic education at the same time.
In short, in May of 2001, by an overwhelming bi-partisan majority, Pennsylvania’s legislature made history by becoming the first state to pass an education tax credit aimed at PA corporations. In essence, the Educational Improvement Tax Credit (EITC) allows qualifying corporations in Pennsylvania to redirect their Pennsylvania tax dollars to qualifying educational institutions, including OMPH School. Eligible businesses may take a tax credit of up to 90% of the amount they contribute to the scholarship fund.
The Diocese of Harrisburg established the Neumann Scholarship Foundation to receive funds contributed under the EITC. The Neumann Scholarship Foundation provides tuition assistance to schools in the Diocese and, when designated, directly to Our Mother of Perpetual Help School.
What Businesses Are Eligible?
All businesses authorized to do business in PA that pay one or more of the following taxes:
- Retaliatory Fees Under Section 21 of the Insurance Law of 1921 (New for 2017)
- Malt Beverage Tax (New for 2015)
- Corporate Net Income Tax
- Capital Stock Tax
- Bank and Trust Company Shares Tax
- Title Insurance Companies Shares Tax
- Insurance Premiums Tax
- Mutual Thrift Institution Tax
- Pennsylvania Income Tax Liability Tax (Personal Income Tax of S corporation shareholders or Partnership partners)
How Does It Work?
Tax Credits may be applied against the tax liability of a business for the tax year in which the contribution was made. Tax credits equal to 75% of its contribution up to a maximum of $750,000 per taxable year; can be increased to 90% of the contribution, if business agrees to provide the same amount for two consecutive tax years.
In certain circumstances, the net effect of the EITC tax credit is a dollar for dollar reduction in the business’ PA tax obligations – this makes the contribution to OMPH School a “costless” program for the participating businesses!!
How Do I Apply?
Applying is as Easy as 1-2-3
For the complete business guidelines, please click here. For the complete
Pennsylvania businesses must file their applications electronically for EITC credits through the Department of Community and Economic Development’s (DCED) single online application system. DCED will no longer require applicants to mail the signed signature page.
For additional information, please review the PA DCED’s EITC Program Overview.
But Hurry! Applications are processed on a first-come, first-served basis by day submitted on July 1st. 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.
Need more information on EITC?
Talk to your accountant about this win-win program!
Visit on the web at www.paschoolchoice.org.
For more information, please call the school development office at 738-2414.