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Educational Improvement Tax Credit Program (EITC)
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Overview
The Education Improvement Tax Credit (EITC) Program provides credits to eligible businesses contributing to one of the following specific programs: a Scholarship Organization, an Educational Improvement Organization, and/or a Pre-Kindergarten Scholarship Organization.

TFEC is eligible to receive funds for the Opportunity Scholarship Tax Credit Program (OSTC) and the Pre-Kindergarten Educational Improvement Tax Credit Program (EITC).
  • Opportunity Scholarship Tax Credit Program (OSTC)
    • TFEC will provide tuition to eligible students who reside within the attendance boundary of a low achieving school to attend a participating nonprofit school or a participating private school located in a school district outside of the recipients school district of residence. Tuition to be paid will include school related fees charged by a school, including special education schools. TFEC will provide tuition to students in the south central PA counties of Cumberland, Dauphin, Franklin, Lebanon, Northern York and Perry. Eligible students are ages K - 12, or age at which they graduate from a secondary school, with financial need as determined by the DCED guidelines. Families apply for funds through an application process managed by TFEC staff.

  • Pre-Kindergarten Educational Improvement Tax Credit Program (EITC)
    • TFEC will provide tuition to eligible Pre-K students to attend a Pre-K program operated by or in connection with a school or a special education school in the south central PA counties of Cumberland, Dauphin, Franklin, Lebanon, Norther York and Perry. Pre-K programs must have a curriculum aligned with the school it is associated with. Eligible student are ages 3-4 years, living in and attending a Pre-K program, with financial need as deteremined by the DCED guidelines. Families apply for funds through an application process managed by TFEC staff.
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 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.


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
  • Insurance Company Law of 1921
  • 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 are not refundable or transferable.

How Businesses Apply
  • Pennsylvania businesses can begin applying for EITC credits through DCED's electronic single application system. 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.

Contact Information

If you have any questions, please contact Jennifer Doyle via email at jdoyle@tfec.org.

This information was obtained from The Pennsylvania Department of Community & Economic Development website.



The Foundation for Enhancing Communities, 200 North Third Street, P. O. Box 678, Harrisburg, PA 17108-0678,
Telephone: (717) 236-5040, Fax: (717) 231-4463