Pennsylvania Educational Improvement Tax Credit
Program
EITC Frequently Asked Questions
What is the "Educational
Improvement Tax Credit (“EITC”) Program?"
Officially known as Act 4 of 2001, this program amends
the Pennsylvania Public School Code to authorize tax credits for businesses
that make contributions to educational improvement organizations or
scholarship organizations.
What are "Educational Improvement
Organizations?"
Educational Improvement Organizations (“EIO’s”) are
non-profit organizations that have been approved by DCED for participation
in the EITC program. To become an EIO, the non-profit must apply to the DCED
to show how their programs improve the educational opportunities for
children. The Upper Dublin Education Foundation (“UDEF”) has been designated
as an eligible “Educational Improvement Organization.”
Who is eligible to participate?
Any entity doing business in
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- Corporate Net Income Tax |
- Capital Stock Franchise Tax |
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- Bank and Trust Company Shares Tax |
- Title Insurance Company Shares Tax |
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- Insurance Premiums Tax |
- Mutual Thrift Institutions Tax |
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- Personal Income Tax of S Corporation Shareholders, or partners in a general or limited partnership. |
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Why should businesses participate?
Businesses can significantly reduce their tax liability
while they support organizations like UDEF that enhance the educational
opportunities for children. Participation in the EITC program provides
significant leverage to the contributions made by a corporation.
Your business can publicize and be proud of large donations that will
cost you very little. All
donations to UDEF support public education and benefit the Upper Dublin
Community.
When does the tax credit program begin, and how much is available?
The program year is July 1 – June 30. In the past, a
total of up to $25 million has been available for educational improvement
organizations. Applications for tax credits are processed until the DCED
funding budget is exhausted. The filing date for this year is
How do businesses apply for the tax
credit?
The process is simple. Businesses must complete a one
page application stating what amount they plan to contribute.
UDEF will assist all businesses
interested in completing the application. We also request that you submit
the application to us. We will hand deliver all applications to DCED on
When are Tax Credit applications
due?
All applications are due in
How do businesses know if and when
they are approved?
The DCED will notify businesses in writing if their
applications are approved. After
receiving approval, businesses have 60 days to make the pledged contribution
to the approved Educational Improvement Organization. The business must also
send the DCED a copy of the confirmation of contribution from the
Educational Improvement Organization(s) to which the contribution was made.
Is application approval guaranteed?
No. Unfortunately, in the past, there were more
applications to the DCED than there was available funding. Because
applications are randomly selected, there is no guarantee that each
application will be approved before funding runs out.
However, it is still very much worthwhile to apply.
The amount of available funding for 2009 has not been released and it
is our hope that more funds will be available this year to accommodate all
applications.
How many tax credits can a business
apply for and how are they used?
Businesses can apply to have up to $300,000 in tax credits approved for donations. Businesses get a credit of 75 percent for one year donations and 90 percent credit for 2 year donations. Tax Credits may be applied against the tax liability of a business for the tax year in which the contribution was made. Click for one-year and two-year tax credit examples. Eligible donations may not exceed $300,000 per taxable year.
Who can I contact if I am
interested?
If you are interested in this program or would like more
information, please contact Pam Ryan at
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