What is the Opportunity Scholarship Tax Credit (OSTC) Program?
The Opportunity Scholarship Tax Credit Program was created in 2012 and allows businesses to contribute to an opportunity scholarship organization to provide funding to eligible students who reside within the attendance boundaries of a low-achieving school. A “low-achieving school” is defined as a public elementary or secondary school in Pennsylvania ranking in the bottom 15 percent of its designation as an elementary or secondary school based on combined math and reading scores on the most recent PSSA results available on the Pennsylvania Department of Education’s website. This term does not include a brick-and-mortar charter school, cyber charter school or area vocational-technical school.
Eligible students include children residing within the boundaries of a low-achieving school who are currently attending their assigned public low-achieving school; or who are residing within the boundaries of a low-achieving school but are currently being home-schooled, enrolled in a non-public school, charter school or cyber school. The Pennsylvania Department of Education will annually publish lists of the bottom 15 percent of elementary schools and the bottom 15 percent of secondary schools, based on combined math and reading PSSA scores, and identify them as low-achieving schools.
What are scholarship organizations?
Scholarship organizations are approved by the PA Department of Community & Economic Development. They 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.
IF YOU ARE A PARENT:
If you would like to apply for an OSTC scholarship for your child, the first step should be to determine whether you reside within the bounds of a low-achieving school that has been assigned to your child. Once that has been determined, you should find out which private school appeals to you. We suggest that you contact the private school to which you wish to apply, 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 OSTC 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 OSTC 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 here for a list of OSTC scholarship organizations.
IF YOU ARE A BUSINESS:
The OSTC Program has accomplished what many in Pennsylvania have been advocating for years: to get the business community more involved in education. The OSTC Program 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, 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, 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 here:
TO CONTACT DCED:
Center for Business Financing, Tax Credit Division
4th Floor, Commonwealth Keystone Building
400 North Street
Harrisburg, PA 17120