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Businesses interested in supporting educational programs in Pennsylvania can begin filing applications for the Educational Improvement Tax Credit (EITC) program this month. Tax credits up to 90 percent are available to eligible businesses contributing to a Scholarship Organization or an Educational Improvement Organization, and up to 100 percent for a Pre-Kindergarten Scholarship Organization.
If you are a current participant and you:
- Are entering year two of a two-year cycle, or
- Have just completed a two-year cycle and are applying for a new two-year cycle
Your filing date for 2022 credits is Monday, May 16, 2022
Normally, the early filing date is May 15th, but since that falls on a Sunday this year, DCED has set the early filing date to Monday, May 16th, the first business day after the 15th.
- Are entering the EITC program for the first time
- Have been past a participant but have been knocked out of the program
- Are currently participating, but want to apply for additional tax credits above your current allocated amount
Your filing date is Friday, July 1, 2022
Pass-through entities, such as S-Corporations, Partnerships, LLCs, etc., can now apply the same day as C-Corporations. Applications must be submitted electronically using DCED’s Single Application for Assistance. Click here for the business application guide.
Businesses may not file before May 16 or July 1, but may fill out the application ahead of time, save it, and then submit it any time between 12:00 a.m. and 11:59 p.m. on the appropriate date. It’s important to file on those exact days.
For those who support Educational Improvement Organizations (EIOs) like The Foundation of The Columbia Montour Chamber of Commerce, this side of the program has been oversubscribed for many years. Most likely, this means that if you are entering the program for the first time, applying to get back into the program, or applying for additional credits, the $37.5 million in available EIO tax credits may be exhausted by the filing date of July 1. However, businesses are encouraged to still apply for EIO credits because businesses drop out of the program every year and there may be EIO credits available. There is no penalty or obligation to apply.
All businesses authorized to do business in Pennsylvania and 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 surplus lines, unauthorized, domestic/foreign marine)
- Mutual Thrift Tax
- Malt Beverage Tax
- Retaliatory Fees under section 212 of the Insurance Company Law of 1921
Businesses that donate to an approved EIO or Scholarship Organization (SO) receive a credit on their Pennsylvania tax liability in the current fiscal year. If you participate for one year, your tax credit is 75 percent of your contribution up to a maximum of $750,000 per taxable year. If you make a two-year commitment, your tax credit increases to 90 percent of your contribution, again up to $750,000 per year.
For contributions to Pre-Kindergarten Scholarship Organizations, a business may receive a tax credit equal to 100 percent of the first $10,000 contributed, and up to 90 percent of the remaining amount contributed up to a maximum credit of $200,000 annually.
For more information on the EITC program, click here.
For the complete application guidelines, click here.