PA EITC/OSTC Program

PENNSYLVANIA EITC & OSTC TAX CREDIT PROGRAM

LEARN HOW TO TURN YOUR TAX DOLLARS INTO TUITION

Pennsylvania Tax Credit Program You have to pay your PA taxes - why not redirect them to Devon Prep!

Financial need is greater than ever for incoming qualified students at Devon Prep. Help give the gift of a Devon Prep education to a student in need.

Over the past three years we have seen a 26% increase in families applying for, and qualifying for financial need.

Qualifying businesses and individuals can redirect their state taxes through the Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) programs. These redirected tax donations provide financial assistance to lower income families at our school.

How Does The Program Work?

Funding

Tax credits equal to 75 percent of its contribution up to a maximum of $750,000 per taxable year which can be increased to 90 percent of the contribution, if a business agrees to provide the same amount for two consecutive tax years.

Terms

An approved company must provide proof to DCED within 90 days of the notification letter that the contribution was made within 60 days of the notification letter. Tax credits not used in the tax year the contribution was made may not be carried forward or carried back and are not refundable or transferable, except for an approved election by a pass-through entity to apply any unused tax credits to the tax liability of the owners in the taxable year immediately following the year in which the contribution is made.

Eligibility

Businesses authorized to do business in Pennsylvania who are subject to one or more of 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 Premium Tax (excluding unauthorized, domestic/foreign marine) Mutual Thrift Tax Malt Beverage Tax Surplus Lines Tax

How to Apply

Businesses Pennsylvania businesses can begin applying for EITC/OSTC credits through DCED’s electronic single application system. DCED will no longer require applicants to mail the signed signature page.

The business application guide explains the process of applying.

Tax credit applications will be processed on a first-come, firstserved basis by day submitted. All applications received on a

specific day will be processed on a random basis before moving on to the next day’s applications. Applications will be approved until the amount of available tax credits is exhausted.

Other ways you can contribute We partner with a few organizations that can make the process even easier for you. Click on their logo’s below for additional information:

Program Overview

Through the establishment of Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) programs, donors can receive up to a 90% tax credit against their personal PA state tax liability by making their gift through through these programs.

An individual or company who wishes to take advantage of this tax-credit program may become a member of a Scholarship LLC (“LLC”). These special purpose entities (or SPE’s), are the only financial vehicle available for individuals (or companies who do not have direct tax credit approval) to be able to realize tax credits in return for scholarship donations.

Join As An Individual!

Now individuals can take advantage of the same tax benefits as businesses.

Through both BLOCS and The Foundation for Catholic Education, you can join as an individual, by applying for acceptance into one of their LLC’s or SPE’s.

To join, an individual or company makes a 2-year commitment, (minimum of $5,000 per year), to fund the LLC. After being approved by the state, BLOCS has 60 days to fund the LLC, meaning your first payment of two will be required within that time period. Your second (or Year 2) contribution will be made approximately one year following the first payment date.

The LLC will then receive tax credits equal to 90% of the donation amount. These credits will be distributed to each member via K-1 and are then applied to your PA tax liability for the tax year in which the donation is made.

We suggest consulting with your tax advisor to learn more and maximize your overall potential tax savings

EITC and OSTC tax credits can be claimed by Companies or Individuals against the following: Corporate Net Income Tax Capital Stock / Foreign Franchise Tax Bank Shares Tax Title Insurance & Trust Company Shares Tax Insurance Premiums Tax Mutual Thrift Institutions Tax Malt Beverage Tax Personal Income Tax Surplus Lines Tax

The following Business Entities can utilize tax credits for Personal income tax liability: S Corporations C Corporations General Partnerships Limited Liability Partnerships Sole Proprietorships Shareholders, Partners or Members of S Corporations

Resources Questions?

You can always reach out to the Devon Prep Office of Development with any questions. Olivia Kane, okane@devonprep.com or Pat Kane, pkane@devonprep.com

Additional Sites Pennsylvania EITC Program Pennsylvania OSTC Program BLOCS Foundation For Catholic Education

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