EITC

About the Pennsylvania Educational Improvement Tax Credit Program (EITC) 

The approval process for EITC participating businesses is underway with approval letters to be distributed throughout the month of September. Please note the COVID-19 amendments which were put in place previously are no longer active. All participating businesses are now back to having 60 days from the date of their approval letter to make their donation.

Any business unable to receive their EITC or OSTC approval letter due to remote working status can contact their project analyst or the Tax Credit Division inbox to request an electronic copy.

Overview

Tax credits to eligible businesses contributing to a Scholarship Organization, an Educational Improvement Organization, and/or a Pre-Kindergarten Scholarship Organization.

Business Application Timeline

1. May 15 – Business applicants who have fulfilled their 2-year commitment and wish to reapply in FY 23/24 to renew their 2-year commitment.
2. May 15 – Businesses who are in the middle of their 2-year commitment.
3. July 3 – All other businesses including initial applicants and those applicants wishing to submit an additional application on top of their previously submitted 2-year commitment. Note: this date is typically July 1 but has been adjusted this year until the next business day.

Pass-through entities, such as S-Corporations, Partnerships, LLCs, etc., can now apply the same day as C-Corporations. Applications must be submitted electronically using DCED’s Single Application for Assistance. See the business application guide in the box above.

Uses

Tax credits may be applied against the tax liability of a business for the tax year in which the contribution was made.

Eligibility

Businesses authorized to do business in Pennsylvania who are subject to one or more of the following taxes:

1. Personal Income Tax
2. Capital Stock/Foreign Franchise Tax
3. Corporate Net Income Tax
4. Bank Shares Tax
5. Title Insurance & Trust Company Shares Tax
6. Insurance Premium Tax (excluding unauthorized, domestic/foreign marine)
7. Mutual Thrift Tax
8. Malt Beverage Tax
9. Surplus Lines Tax

Funding

Tax credits equal to 75 percent of its contribution up to a maximum of $750,000 per taxable year. Can be increased to 90 percent of the contribution, if business agrees to provide same amount for two consecutive tax years. For contributions to Pre-Kindergarten Scholarship Organizations, a business may receive a tax credit equal to 100 percent of the first $10,000 contributed and up to 90 percent of the remaining amount contributed up to a maximum credit of $200,000 annually.

Terms

An approved company must provide proof to DCED within 90 days of the notification letter that the contribution was made within 60 days of the notification letter. Tax credits not used in the tax year the contribution was made may not be carried forward or carried back and are not refundable or transferable, except for an approved election by a pass-through entity to apply any unused tax credits to the tax liability of the owners in the taxable year immediately following the year in which the contribution is made.

How To Apply

Businesses

Review the list of approved Pennsylvania Educational Improvement Organizations, effective 01/01/2023 – 12/31/2023:

https://dced.pa.gov/educational-improvement-organizations/

For additional information, please visit the Pennsylvania Department of Community and Economic Development website here: https://dced.pa.gov/programs/educational-improvement-tax-credit-program-eitc/).