PA Educational Improvement Tax Credit Program FAQs
What are Educational Improvement Tax Credits?
A tax credit for businesses that makes a donation to an educational improvement organization(s) (local education foundation) to help implement programs not supported by the school district budget.
What businesses qualify?
Businesses authorized to do business in PA who are subject to one or more of the following taxes: Corporate Net Income Tax; Capital Stock Franchise Tax, Bank and Trust Company Shares Tax; Title Insurance Companies Shares Tax; Title Insurance Companies Shares Tax; Insurance Premiums Tax; or Mutual Thrift Institution Tax
How much of a tax credit can I get for my business?
The tax credit is a 75% credit (against taxes owed). However, if a company provides a written two-year commitment of equal funding, the credit becomes 90% (existing charitable deductions still apply with this credit, increasing the value of the tax credit) Eligible companies may take up to $300,000 in tax credits per year.
What 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 use 80% of their annual receipts on approved programs. Additionally, they must register with the Department of Community and Economic Development (DCED) be listed and placed on a list of eligible organizations.
Can businesses contribute to more than one organization?
Yes. Businesses can donate to as many eligible organizations as they choose.
Is the Exeter Community Education Foundation an Educational Improvement Organization?
What is the process for businesses to receive the tax credit?
Business will apply to DCED for the tax credit. If the organization is listed with the department and there is money available in the program (there is an annual dollar cap on the program) tax credits will be awarded on a first-come, first served basis. After approval, businesses must make their contributions within 60 days.
When is the application due?
The application is due to the Department of Community and Economic Development on July 1st of each year. No earlier or you will be considered for current fully committed funding; no later since it is first come, first served. Funds are generally exhausted on the first day. May 15th for renewals.
Is the application complex?
No it is very simple, just one page. Businesses can complete it in just a few minutes. Do it now.
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