EITC: Helping Your Local School Can Help Your Business

July 20, 2015

By Dan Piasecki

The Educational Improvement Tax Credit (“EITC”) is an opportunity for businesses and business owners to reinvest in their communities by making a charitable contribution to qualified educational improvement, scholarship and pre-K organizations.  In exchange for the contribution, the business will receive a tax credit of up to 90% of the value of the contribution to be used against various Pennsylvania taxes including (but not limited to):

  • Corporate Income Tax;
  • Capital Stock Tax; and
  • Personal Income Tax. 

A list of qualified organizations can be found on the Pennslyvania Department of Community and Economic Development’s website .

Time is of the essence as there is a limited amount in the tax credit pool. Credits are issued on a first-come, first-serve basis.  The application period opens July 1 each year. Once all the credit money is allocated, a taxpayer must wait until the following July 1 to try again.   

The business community has overwhelmingly responded to this Program. Since its inception in 2001, more than 23,500 applications have been approved pledging in excess of $657 million dollars to the programs.  When you combine the benefits of a federal charitable contribution and the state tax credits, many businesses receive a benefit that exceeds the amount of the contribution.  Don’t wait to take advantage of this opportunity. 

For more information and application contact your tax advisor.  Additionally, there is a program summary on the Department’s website.

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