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Educational Improvement Tax Credit (EITC)

Use Your PA State Taxes to Support Student Scholarships

You have a unique opportunity to use your PA state income tax to help make Christ-centered, high quality education at LM accessible for more students through the Educational Improvement Tax Credit (EITC) program while receiving up to 90% of this amount back as a tax credit.

We could FULLY fund our need-based student aid with YOUR help!

The Educational Improvement Tax Credit (EITC) is a state program that allows eligible businesses to receive up to a 90% tax credit on contributions to an EITC scholarship organization. The tax credits to eligible businesses can contribute to a Scholarship Organization, an Educational Improvement Organization, and/or a Pre-Kindergarten Scholarship Organization. In 2014, Pennsylvania’s EITC legislation was amended to allow certain individuals (rather than only businesses) to participate in the EITC tax credit program through what is called a Special Purpose Entity (SPE).

Who can participate?

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

  • Personal Income Tax
  • Capital Stock/Foreign Franchise Tax
  • Corporate Net Income Tax
  • Bank Shares Tax
  • Title Insurance & Trust Company Shares Tax
  • Insurance Premium Tax (excluding unauthorized, domestic/foreign marine)
  • Mutual Thrift Tax
  • Malt Beverage Tax
  • Surplus Tax

Basic criteria:

  • 2 year commitment
  • Tax credits equal to 75% of its contribution up to a maximum of $750,000 per taxable year.
  •  Can be increased to 90% of the contribution, if business agrees to provide the same amount
    for two consecutive tax years.
  • Tax credits are worth 90% of the taxpayer’s bill. The remaining 10% may be claimed on the
    federal tax return as a charitable donation.

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

Designation Form
Application Guide

Business Application Timeline

  • May 15, 2023 – Business applicants who have fulfilled their 2-year commitment and wish to reapply in FY 23/24 to renew their 2-year commitment.
  • May 15, 2023 – Businesses who are in the middle of their 2-year commitment.
  • July 3, 2023 – All other businesses including initial applicants and those applicants wishing to submit an additional application on top of their previously submitted 2-year commitment.

EITC Guidelines
Business Application Guide

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 above.

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.

How to Apply

  1. Determine the amount of your PA tax liability.
  2. Apply through the Department of Community and Economic Development’s (DCED) electronic application system.
  3. Receive approval letter and complete the Designation Form. Then send back the Form with your check to “Everence Foundation” with a copy of the DCED approval letter (Let LM know too!).
  4. Tax forms will arrive from Fund.

Pennsylvania businesses can begin applying for EITC credits through DCED’s electronic single application system. DCED will no longer require applicants to mail the signed signature page.

The business application guide explains the process of applying. Tax credit applications will be processed on a first-come, first-served basis by day submitted. All applications received on a specific day will be processed on a random basis before moving on to the next day’s applications. Applications will be approved until the amount of available tax credits is exhausted.

Once you have received your approval letter please complete the Designation Form and mail the form with your check to Everence Foundation. Please be aware you will also need to include a copy of your approval letter from the Department of Community and Economic Development (DCED) with this form.

If you would like to take advantage of this opportunity or if you have any questions, please contact Luis Torres, torresld@lancastermennonite.org, 717-740-2426, ext. 1021.

For questions about your individual tax situation, please speak directly with an accountant or the person that helps you prepare your tax return(s).

Uses

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

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.