What is the Educational Improvement Tax Credit (EITC) Program?
On May 7, 2001, by an overwhelming bipartisan majority, Pennsylvania made history by becoming the first state to pass an education tax credit aimed at corporations. The Educational Improvement Tax Credit (EITC) provides companies with a credit for donations to a nonprofit scholarship or educational improvement organization. More important, the EITC Program provides children and families with a choice in their education and a chance in life.
What are Scholarship Organizations?
Scholarship organizations are approved by the PA Department of Community & Economic Development, and are divided in three categories: pre-K scholarship organizations (Pre-K SO), K-12 scholarship organizations (SO) and educational improvement organizations (EIO). Pre-K scholarship organizations and K-12 scholarship organizations provide parents with the opportunity to apply for scholarships so that their children may attend the school of their choice and a school that better fits the needs of each child. Educational improvement organizations fund innovative programs in public schools across the commonwealth.
IF YOU ARE A PARENT:
If you would like to apply for an EITC scholarship for your child, the first step should be to determine which school appeals to you. We suggest that you contact the school and speak to its administrators about the cost of attendance, find out if there are any scholarships awarded directly through the school, and proceed to apply for EITC funding as needed. Oftentimes, the school administrators will guide parents through this process. Once you are ready to apply, you may contact the state-approved scholarship organizations and fill out an application. Organizations will oftentimes require a small application fee, as well as income documentation (for example, a W-2, 1099 or paystubs). A child may be awarded one single scholarship or many partial scholarships from various scholarship organizations. Because applications are processed on a first-come, first-served basis, we recommend that parents apply for funding as early as January for the following school year. Although REACH created the EITC Program, we are not a scholarship organization. However, we are glad to help you and guide you along the way. Please do not hesitate to contact REACH with questions.
Click below for a list of scholarship organizations:
IF YOU ARE A BUSINESS:
The EITC Program 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 nonprofit charities, at a minimal cost, instead of sending their tax dollars to Harrisburg. It’s that simple. The business community has overwhelmingly responded to the challenge. The children of Pennsylvania thank you!
If your business is interested in contributing to a scholarship organization, a pre-K scholarship organization or an educational improvement organization, you may apply via the Department of Community & Economic Development (DCED). Once approved, a business must make its contribution to an approved organization within 60 days for the amount for which its application was approved. Then, proof must be sent to DCED within 90 days of the approval notification letter stating that such contribution was made. A business’ tax credits can then be applied against tax liability for the year in which the contribution was made; tax credits not used in the tax year of the contribution may not be carried over to the following year.
Business applications are due to DCED on the following dates each year:
May 15 – Business applicants who have fulfilled their two-year commitment and wish to renew for another two years; businesses who are in the middle of their two-year commitment
July 1 – All other businesses, such as first-time applicants and return applicants who did not enter a two-year commitment
For further information, business guidelines and to apply directly to DCED, please click here:
IF YOU ARE A SCHOLARSHIP ORGANIZATION OR WOULD LIKE TO BECOME ONE:
To become a new scholarship organization or educational improvement organization, you will need to apply with the Department of Community & Economic Development (DCED) and, once approved, maintain your status as required. If you are interested in applying, please click below:
TO CONTACT DCED:
Center for Business Financing, Tax Credit Division
4th Floor, Commonwealth Keystone Building
400 North Street
Harrisburg, PA 17120