Entities eligible to apply for EITC are operating business firms authorized to do business in the Commonwealth of Pennsylvania that are subject to 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 Premiums Tax (excluding unauthorized, domestic/foreign marine)              

Mutual Thrift Tax

Malt Beverage Tax

Surplus Lines Tax

Such business firms include pass-through entities and special purpose pass-through entities. Special purpose pass-through entities are created for the purpose of making contributions under Article XX-B of the Public School Code of 1949 and, whose shareholders, partners, or members are composed of owners or employees of other business firms.

To receive tax credits, businesses must be approved by the PA Dept. of Community and Economic Development (DCED to make contributions to:

Scholarship Organizations (SO)

 Educational Improvement Organizations (EIO)

 Pre-Kindergarten Scholarship Organizations (PKSO)

Organizations approved to receive contributions are on the list of such organizations published by the DCED. The current list of Scholarship Organizations, Educational Improvement Organizations and Pre-Kindergarten Scholarship Organizations is on the Department's web site at www.dced.pa.gov/EITC.

For Educational Improvement Organizations, a business firm will be approved for a tax credit equal to 75% of its contribution(s) to listed organization(s), up to a maximum of $750,000 per taxable year. The tax credit may be increased to 90% of the contribution(s) made, up to a maximum of $750,000 per taxable year, if the business firm agrees at the time of application to provide the same amount of contribution for two consecutive tax years. To ensure the receipt and retention of the 90% tax credit, the business firm must make the same amount of contribution in each of the two consecutive tax years.

For Pre-Kindergarten Scholarship Organizations, a business firm may receive a tax credit equal to 100% of the first $10,000 contributed to a listed Pre-Kindergarten Scholarship Organization(s) during the taxable year, and may receive a tax credit equal to 90% of any additional amount contributed during the taxable year, up to a maximum of $200,000 of tax credits per taxable year. Agreeing to a two-year commitment will have no impact on the tax credit calculations outlined in this section.

All applications for the Educational Improvement Tax Credit Program must be completed and submitted online using DCED’s Single Application for Assistance that can be accessed at dced.pa.gov or www.esa.dced.state.pa.us.

Initial applicants and those applicants wishing to submit an additional application on top of their previously submitted 2-year commitment may apply  beginning July 1^st

Businesses who are in the middle of their 2-year commitment as well as business applicants who have fulfilled their 2-year commitment and wish to reapply may begin to apply May 15^th and if received prior to June 30^th will be processed prior to any other applications

Upon receipt of written notification from the DCED approval of tax credits, the business firm must make its contribution(s) to an approved Educational Improvement Organization(s) and/or Pre-Kindergarten Scholarship Organization(s) within 60 days of the date of the letter. The business must provide proof of the contribution in the form of a written acknowledgment from the organization to the DCED within 90 days of the date of the approval letter. A business firm will only receive tax credits for donating to the type of organization and amount that is specified in the application and approval letter. The Department of Revenue will consider tax credits awarded under this program to be effective on the first day of the taxable year in which the contribution was made.

Nedra L. Perkins