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The Educational Improvement Tax Credit program (EITC) now applies to personal income tax from pass-through entities, Limited Liability Parnerships (LLP), "S" corportations, partnerships, etc.The EITC provides scholarships to students in need of financial aid. Tax credits are awarded to eligible businesses contributing to an approved Scholarship Organization, an Educational Improvement Organization, and/or a Pre-Kindergarten Scholarship Organization.
Uses:
Tax credits may be applied against the tax liability of a business for the tax year in which the contribution was made.
Funding:
Tax credits equal to 75% of its contribution up to a maximum of $300,000 per taxable year; Can be increased to 90% 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% of the first $10,000 contributed and up to 90% of the remaining amount contributed up to a maximum credit of $150,000 annually. No credits remain for contributions to Educational Improvement Organizations. Approximately $11,000,000 remains for contributions to Scholarship Organizations. Less than $1,000,000 remains for contributions to Pre-Kindergarten Scholarship Organizations.
Eligibility:
Businesses authorized to do business in Pennsylvania 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; Insurance Premiums Tax; Mutual Thrift Institution Tax; or Personal Income Tax of "S" corporation shareholders or Partnership partners.
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 is not refundable or transferable.
Where to Apply:
DCED Center for Business Financing, Tax Credit Division, 4th Floor, Commonwealth Keystone Building, 400 North Street, Harrisburg, PA 17120: (717)-787-7120 or tknorr@state.pa.us. Applications are approved on a first-come-first-served basis by date received. EITC Business Guidelines
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Re-application for second-year applicants opens May 15,2010
- New applications for corporate tax credit are accepted July 1, 2010
- New applications for personal income tax credits are accepted July 8, 2010
The state legislature is considering severe cutbacks to the EITC program in the upcoming state budget. Click the OPERATION RESTORE link to voice your desire to restore the EITC.
