EITC: Helping Your Local School Can Help Your Business
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.