PA Educational Tax Improvement Tax Credit Program
What is the EITC Program?
Through Pennsylvania’s Educational Improvement Tax Credit (EITC) program, qualified businesses can make a donation to the Spina Bifida Assocation of Western PA (SBAWP) and receive tax credits equal to a percentage of their gift.The Spina Bifida Association of Western PA is an approved Educational Improvement Organization (EIO) in the EITC program. Gifts through the EIO program enable the SBAWP to provide essential programming to individuals with spina bifida and related disabilities throughout Western PA.
Is Your Company Eligible?
A company is eligible to donate to the SBAWP through EITC if the company pays one of the following taxes:
Corporate Net Income Tax
Capital Stock Franchise Tax
Bank and Trust Company Shares Tax
Title Insurance Companies Share Tax
Insurance Premiums Tax
Mutual Thrift Institutions Tax
Personal Income Tax of S Corporation Shareholders or Partnership partners
The Pennsylvania Department of Community and Economic Development determines the eligibility of businesses as well as educational improvement organizations.
What Steps Must a Company Take to Participate in EITC?
A company interested in giving to the SBAWP through the EITC program must complete an application form. The form is available by calling the Department of Community and Economic Development at (717) 787-7120 or accessing the PA Department of Economic Development’s website online.
When Should a Company Apply?
Both new and renewing EITC business participants receive approval on a first-come, first-served basis. When the tax credits given to organizations equals the maximum allowed to be credited for the year, the Department of Community and Economic Development will close the EITC opportunity until the following year.
**The EITC credit limit for the EIO program is often reached one or two days after applications are accepted. After that time, the Department of Community and Economic Development can no longer offer EITC credits for the fiscal year. However, in the last few years, the credit limit for the EITC EIO program has not been reached.
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 RA-EITC@pa.gov. Applications are approved on a first-come-first-served basis by date received. All funds for FY 13-14 have been fully exhausted. Applications for FY14-15 will be accepted beginning July 1, 2014.
How Can My Company Benefit?
The maximum tax credit that a participating company will receive through an EITC donation to the SBAWP is $300,000.
The Department of Community and Economic Development calculates the tax credit based on the length of the business’ EITC commitment to the SBAWP.
One-year contribution: A business that makes a one-year EITC contribution to the SBAWP receives a tax credit equal to 75% of the donation.
Two-year contribution: A business that makes a two-year contribution to the SBAWP receives a tax credit equal to 90% of the donation. A two-year commitment must be made in writing and accompany the donation.