Pennsylvania’s EITC and OSTC Tax Credit Programs
Pennsylvania offers a great way for businesses, and even individuals, to receive potential tax benefits for their charitable contributions through the Educational Improvement Tax Credit Program (EITC) and the Opportunity Scholarship Tax Credit Program (OSTC).
Educational Improvement Tax Credit Program
The most popular program – the EITC – allows businesses to receive a credit against Pennsylvania taxes by contributing to one of three types of organizations: Educational Improvement Organizations, Scholarship Organizations, and Pre-K Scholarship Organizations. The OSTC is very similar to the EITC, but the donations may only go to scholarship organizations for students in underperforming schools.
The Pennsylvania Department of Community and Economic Development (DCED) runs these programs and provides a list of the organizations to which participants can donate here. If an organization is not on the list, but meets the criteria they simply need to apply to be considered. The types of businesses that qualify for the program include those authorized to do business in the Commonwealth of Pennsylvania which are subject to tax or whose owners are subject to tax. This includes pass-through entities and special purpose pass-through entities.
Applications open July 1st for new applicants and May 15th for returning applicants. The applications are accepted on a first-come-first-serve basis, so businesses should apply on their respective application dates for the best chance of being accepted into the program.
Watch the video below to learn more about the EITC and OSTC programs.
If you have any questions regarding the programs and steps to apply, please contact Lindsey Waltemyer, Tax Manager and Leader of McKonly & Asbury’s State and Local Tax group at lwaltemyer@macpas.com.
