Your Guide to Understanding the PA Educational Tax Credit Programs 2019

Lancaster Catholic High School Your Guide to Understanding the PA Educational Tax Credit ProgramsEITC & OSTC for Businesses & Individuals (SPEs)

Overview Pennsylvania provides ways for you and/or your business to redirect a portion of your state taxes from Harrisburg and to a school(s) of your choice!

• Since you have to pay state taxes, why not have a say in where some of your taxes go!?!

• Biggest no-brainers ever!

• We will work together with your accountant or tax-preparer Two opportunities to participate: • Your Business’ State Taxes • Your Individual State Taxes

Business Participation S-Corps, C-Corps, LLCs and Limited Partnerships are eligible to participate in the EITC & OSTC Programs Qualifying taxes include: • Personal Income Tax • Capital Stock/Foreign Franchise Tax • Corporate Net Income • Bank Shares Tax • Title Insurance & Trust Company Shares Tax • Insurance Premium Tax (excluding surplus lines, unauthorized, domestic/foreign marine) • Mutual Thrift Tax • Malt Beverage Tax • And more…

Business receives: • 90% state tax credit for 2-year commitment (renew annually) • 75% state tax credit for 1 -year commitment (renew annually)

Benefits businesses in two ways: • Credit against PA Taxes – Tax reduction is dollar for dollar against tax liability • Federal Tax Deduction – Reduction of net income due to charitable contribution (guaranteed 10% and could be as high as 100%)

Business Participation continued. . .

4 Simple Steps to Apply: • Submit online EITC/OSTC application to www. dced.pa.gov/eitc or www.dced.pa.gov/ostc *Please Note: Application Type is SO (not EIO) • Once approved, business receives DCED acceptance letter • Business has 60 days to submit check to Neumann Scholarship Foundation at the Diocese of Harrisburg * Please Note: Memo Line - “Designated to Lancaster Catholic H.S. ” • Business has 90 days to submit copy of Receipt of Contribution to DCED

Apply by May 15th to renew, or July 1st as a new applicant

Receive approval from State with DCED Approval Letter

60

90

Submit contribution within 60 days to the Neumann Scholarship Foundation at the Diocese of Harrisburg

Send a copy of the Reciept of Contribution to the DCED within 90 days

Reduce taxable income dollar for dollar while helping students afford Lancaster Catholic High School!

Individual Participation Now individuals have the opportunity to participate fully in the EITC & OSTC Programs by joining a Special Purpose Entity (SPE).

Accredited investor (qualifying individual): • Earn yearly income of at least $115,000 & owe at least $3,500 in state income taxes

- Itemize deductions; do NOT take standard deduction • Retirees who own a small business (receive annual K-1 form) or work for a business (receive annual W-2 form) or possess net worth of at least $1 Million

Benefits to Individuals: • 90% state tax credit for 2-year commitment (renew annually) • 75% state tax credit for 1 -year commitment (renew annually) • Federal charitable tax deduction of at least 10% and up to 100% on Federal itemized deductions (Schedule A)

Determine eligibility with accountant

Complete and submit Joinder Agreement

Receive approval from State with DCED Approval Letter

Make contribution to SPE Fund at Lancaster Catholic

Reduce taxable income dollar for dollar while helping students afford Lancaster Catholic High School!

Individual Participation continued. . .

There are numerous SPEs! Lancaster Catholic H.S. currently works with these SPEs: The Central Pennsylvania Scholarship Fund (free) Contact: Tami Clark (Executive Director) Phone: 814-942-4406 Email: CentralPAScholarshipFund@gmail.com www.pennsylvaniaeitc.org/ The Association of Christian Schools International (5% fee) Contact: Catherine Long Phone: 717-285-3022 Email: catherine_long@acsi.org www.acsi.org/ CPA point of contacts: Sickler, Tarpey & Assoc.

Contact: Mr. Randy Tarpey Office Phone: 814-684-4640 Email: randytarpey@hksickler.com Trout, Ebersole & Groff Contact: Mr. Todd L. Harrington Office Phone: 71 7-358-9137 Email: tharrington@troutcpa.com All participants must complete a one-page Joinder Agreement, which can be provided by Joe Sahd ‘01 (jsahd@lchsyes.org).

Impact of Tax Credits on LCHS LCHS provides over $1 million annually in tuition assistance & scholarships to over 53% of our student body! The majority of these funds come from the PA Education Tax Credit Programs!

Next Steps • Contact your accountant/tax preparer to confirm your eligibility to participate individually (SPE) and/or through your business • Contact Lancaster Catholic High School to:

- Obtain the Joinder Agreement

- Request additional information and/or ask questions • Please join us for one of our evening information sessions and learn about this process first-hand from professional accountants who serve our entire Lancaster County community Lancaster Catholic High School Contact: Joe Sahd ‘01 Office Phone: 717-509-0313 Mobile Phone: 717-875-0766 Email: jsahd@lchsyes.org