Follow three simple steps to make this happen:
Step 1: Decide if you pay any of these PA taxes.
subchapter S Corps, Limited Partnerships and other Pass thourgh organizations (for example filing PA Forms 20S or 65)
Personal Income Tax Passed Through
Corporate Net Income Tax
Capital Stock/Foreigh Franchise Tax
Bank Shares Tax
Title Insurance & Trust Company Shares Tax
Insurance Premiums Tax
Mutual Thrift Institutions (excluding surplus lines, unauthorized, domestic/foreign marine)
Surplus Lines Tax
Retaliatory Fees Under Section 212 of the Insurance Company Law of 1921
You can get up to 100% PA Tax Credit on your business tax return.....and still use it as a deduction on your Federal return!
Step 2: Apply online and decide which fund (EITC or OSTC).
1. EITC Pre-K or K-12 Program:
Go on the DCED website, register your organization and apply online. If there are funds available and the company does not owe back taxes, DCED will send an approval letter to the applicant. The company then has 60 days to make its donation(s) and 90 days to send proof of the donation(s) to DCED. Click here to see a sample tax calculation sheet that SubChapter S, Limited Partnerships, and other Pass Through Business entities can utilize. Email us if you need more information.
2. OSTC Program:
General information and application click here
Step 3: Consider the Center's Scholarship Organization for your gift
There are three tax credit programs available that the Center participates in:
- A K-12 Tuition Tax Credit for students in Elementary School and High School
- An Early Education Tax Credit for students in Preschool.
- An Opportunity Scholarship Program that is designed to help students in the lowest 15% of failing public schools in the Commonwealth.
Champion Christian Schools are our primary focus but we also manage funds for Laurel Trinity Preschool and Westmoreland Christian Academy.
Overview of the Process:
May 15th: Is the first day that businesses who have participated in one of the programs previously can re-apply for the next year. These would be Year 2 Applicants, and what are considered Year 3 Applicants (People who finished their Year 2 and are re-applying again to the program).
July 1st: Is the first day the State (DCED) is accepting applications for the tax credit. It is very important to get your application in on this day! Applying for the credit does not mean you have to use it at this point. It means it is awarded and available for use. They will continually award credits (then later withdraw them if they are not used and re-issue them) until the credits are all actually awarded and taken.
Date Credit is Awarded: For all of the applications that come in on July 1st they are treated equally as having arrived at the same time. The State goes through these and then begins to issue credit award letters. For the applications submitted in July, sometimes this is in July and sometimes in August.
Date Donation is made to the Center's Scholarship Program: The actual check has to be received in our office and receipted within 60 days of the credit being awarded. This is commitment time for your business. The donation that you make can be for part of or all of your tax credit award, but not more.
End of Business YearYou apply your credit to your tax return, and utilize the gift portion that you are allowed. Your State Tax Credit is applied, and you also apply the donation as a gift on your Federal Return.
Tax Credits: More Attractive than a Standard Charitable Donation
Yes! While deductions reduce your amount of taxable income, tax credits reduce your actual tax bill, dollar-for-dollar. A one year K-12 commitment allows a business 75% credit against taxes owed, however a company who makes the same commitment for two consecutive years to the K-12 Program will be eligible for a 90% credit. Tax credits are utilized AFTER your tax liability is established and eligible companies may take up to $400,000 in tax credits per year. This is even more (100%) for money given to the Pre-K Tax Credit.
The P-K Program allows 100% Credit for the first 10,000 and then 90% after that. Only a one year commitment is required. The funds are extremely limited for this fund, and they are very competetive. This credit is very competitive. We encourage businesses to act quickly and decisively and to utilize Center staff for any support we can provide for you in this program.
DCED in PA manages the program