PENNSYLVANIA TAX CREDIT PROGRAMS: EITC, OSTC & SPE

COVID-19 Notice on PA Tax Credit Programs

 

The contribution deadline for Pennsylvania’s popular Educational Improvement Tax Credit (EITC) program has been extended due to the COVID-19 pandemic. Under normal circumstances, businesses are required to make their contributions within 60 days of approval of their application by the state. Pennsylvania has extended that deadline until the end of the business entity’s tax year. In addition, Pennsylvania will not reduce tax credits if a business participating in the EITC does not contribute their full second-year commitment. Businesses will still receive 90% of the amount they contribute in year two, and year one credits will not be reduced. The administrative changes to EITC contributions will apply to all tax years impacted by the COVID-19 disaster emergency.
 

 

 

Your company can change the lives of at-risk children by giving them a choice in their education!

Educational Improvement Tax Credit (EITC) Program

Since 2001, the Educational Improvement Tax Credit (EITC) program has provided companies paying taxes in Pennsylvania with tax credits for donations to approved scholarship organizations such as Imani Christian Academy. 

 

Imani is eligible as a Scholarship Organization and  

Pre-Kindergarten Scholarship Organization.

 

Opportunity Scholarship Tax Credit (OSTC) Program

Pennsylvania created the OSTC Program in 2012, allowing Imani to provide tuition assistance in the form of scholarships to eligible students residing within the boundaries of a low-achieving school 

 

A low-achieving school is defined as a public elementary or secondary school ranking in the bottom 15 percent of their designation as an elementary or secondary school based upon combined math and reading Pennsylvania System of School Assessment (PSSA) scores.

 

Benefits to Pennsylvania Businesses

The EITC and OSTC programs enables a Pennsylvania business to direct up to $750,000 of its Pennsylvania state tax dollars directly to Imani Christian Academy's scholarship program. Tax credits are given for 75 percent of a one-year gift and 90 percent of gifts given in two consecutive 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 percent of the remaining amount contributed up to a maximum credit of $200,000 annually.

 

Since the budgets are separate, a business can apply for up to $750,000 in tax credits from the EITC program, $750,000 from the OSTC program, and $200,000 from the EITC Pre-Kindergarten component within the same fiscal year. 

Eligibility

Eligible businesses must be authorized to operate in Pennsylvania and 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 and Personal Income Tax of S Corporation Shareholders, Malt Beverage Tax, or partners in a general or limited partnership.  

When to Apply for EITC and OSTC

May 15, 2020For businesses who have fulfilled their 2-year commitment and would like to renew.

 

May 15, 2020For businesses in the middle of a 2-year commitment.

 

July 1, 2020All new businesses applying for the first time.

 

Please apply for your OSTC tax credits as soon as possible and before September 30th, as the program is becoming increasingly popular and the funds may be exhausted once the cap is lifted on October 1st.

 

EITC and OSTC applications are approved on a first-come, first-served basis by date received.   

 

For new businesses participating in the EITC program, credits are awarded beginning midnight July 1, and are typically exhausted within 2-3 days. 

EITC and OSTC Amendments

All unallocated OSTC tax credits will be redistributed to EITC applicants currently on the waiting list and new applicants after January 1st.  Tax credits approved based on reallocated tax credits will only be eligible for a 1-year 75% tax credit.

 

Businesses that have previously received EITC funding now have the ability to default to the OSTC Program once the EITC funding is depleted. You can select this option by checking "yes" at the top of the application page under the addenda tab.
 

To view all of the amendments, please read the summary for House Bill 91. 

How to Apply for OSTC Tax Credits

1. Read the OSTC Business Guidelines to verify that your business  qualifies for tax credits.  

 

2. Review the Desktop Guide to get step-by-step instructions on      how to complete the application. 

 

3. For first time applicants, register your business and login from    the Single Application for Assistance page. 

 

4. Businesses that have already registered can login to the 

Single Application for Assistance page. 

 

5. Once logged in, complete the application and in approximately   two weeks you will hear from the DCED about whether you             have been approved to participate. 

 

6. Once you are approved, you must make your donation to Imani within 60 days of the date of the DCED approval letter. 

 

7. Imani will send you a written letter of acknowledgement as proof of your contribution, which needs to be sent to DCED within 90 days of the date of the original approval letter.

Please refer to the EITC/OSTC Fact Sheet  for additional details on these incredible programs.

How to Apply for EITC Tax Credits

1. Read the EITC Business Guidelines to verify that your business qualifies for tax credits.  

 

2. Review the Desktop Guide to get step-by-step instructions on how to complete the application process. 

 

3. For first time applicants, register your business and login from the Single Application for Assistance page. 

 

4. Businesses that have already registered can login to the Single Application for Assistance page. 

 

5. Once logged in, complete the application and in approximately   two weeks you will hear from the DCED about whether you have been approved to participate. 

 

6. Once you are approved, you must make your donation to Imani within 60 days of the date of the DCED approval letter. 

 

7. Imani will send you a written letter of acknowledgement as proof of your contribution, which needs to be sent to DCED within 90 days of the date of the original approval letter.

To learn more about EITC or OSTC and how you can direct your dollars to benefit Imani, please contact

Barbara Nicholas at 412-723-1636 or bnicholas@imaniadmin.org for more information.

 

We can help guide you through the process or answer any questions.

Imani Christian Academy

2150 East Hills Drive

Pittsburgh, PA  15221

Phone:  412-731-7982 

Fax: 412-731-7343