Education Tax Credit Application Period Approaching

For businesses that have participated in the Educational Improvement Tax Credit (EITC) program, May 15 is a critical date. The popular state program provides funding for Pre-K scholarships, scholarships for private schools, and educational enhancement programs like those supported by the Chamber’s Foundation. Despite increased allocations to the program in recent years, eligible businesses are strongly encouraged to submit applications on the early enrollment date.

Important points to note are:

1.  Companies that have fulfilled a two-year commitment in their most recently completed fiscal year continue to receive preferential treatment by being allowed to file for a new “initial” application between May 15th and June 30th for the start of another two-year commitment. Moreover, those companies will be able to increase the amount they are applying for as the limit of combined credits for any fiscal year is up to $750,000. Companies that wish to make contributions to Pre-K Scholarship Organizations may receive a tax credit equal to 100% of the first $10,000 contributed and up to 90% of the remaining amount contributed up to a maximum credit of $200,000 annually.

2. Businesses applying for Pre-K credits may now choose to make a two-year commitment. Companies supporting Pre-K organizations now also receive the “preference” for filing on May 15th, having successfully fulfilled a two-year commitment in their most recently completed fiscal year.

3. All EITC applications must be filed electronically. (This will include companies filing for their second-year credits beginning on May 15th.) Paper applications are no longer accepted. Once a company has established a “profile” online, almost everything will be completed electronically. DCED no longer requires applicants to mail the signed signature page.

The current guidelines are now available on the DCED website. The applications are now available online but cannot be filed until May 15. Businesses that are not currently active in the program must wait until July 3 to apply. Due to the recent allocation increase, and current legislation that would further increase the allocation, interested businesses may want to consider submitting a new application on that date.

The Chamber has been advocating since 2014 that the application process be open to all Pennsylvania-based businesses at the same time. A letter renewing that call was recently sent to Senator Gordner and the members of the Senate Education Committee, where the legislation is being considered.