HB 996, the Educational Improvement Tax Credit (EITC), provides companies with a 75% tax credit for donations to a non-profit scholarship or educational improvement organization.  The tax credit increases to 90% if the company commits to making the same donations for two consecutive years.  A business paying taxes in Pennsylvania can receive up to $300,000 in tax credits annually.  More importantly, the EITC provides children and families with a choice in their education and a chance in life.

 

Scholarship Organizations provide scholarships to children to attend the schools of their choice.

 

Educational Improvement Organizations fund innovative programs in public schools across the Commonwealth.

 

Pre-K Scholarship Organizations fund scholarships to children so families have the ability to choose the pre-K that best fits the needs of their child.

 

 

 

The approval of the PA State Budget and School Code Bill for 2008-2009 FY brought about several major changes to the EITC:

• Subchapter S corporations and other business entities that pay their State business taxes under the personal income tax on PA business income can now fully participate in the Program

• The business tax cap is $300,000 for businesses contributing to scholarship organizations and educational improvement organizations (In previous years, businesses contributing to the EITC have not been able to contribute over $200,000)

• The business tax cap is $150,000 for businesses contributing to pre-K scholarship organizations (In previous years, businesses contributing to the EITC have not been able to contribute over $100,000)

 

 

During 2007-08, 44,000 children across Pennsylvania benefited from EITC scholarships and countless numbers of children in public schools benefited from innovative programs that would have likely have gone unfunded.

 

 

The EITC has accomplished what many in Pennsylvania have been advocating for years: to get the business community more involved in education. The EITC enables companies to support local non-profit charities, at minimal cost, instead of sending their tax dollars to Harrisburg. It's that simple.

 

The business community has overwhelmingly responded the challenge. To date, over 3,600 companies have pledged in excess of $350 million dollars to the programs. The children of Pennsylvania thank you!

 

 

EITC scholarships have provided thousands of lifeboats to families looking to escape failing public schools, as well as to families struggling to remain in non-public schools.  Each time a child moves from a public to non-public school and each time a child is able to stay in a non-public school as a result of the EITC, both taxpayers and families win!  One study has already documented savings of  $360,000 dollars annually to the Philadelphia School District as a result of the Futuro Educacional scholarship organization.