What is the EITC program?
The Commonwealth of Pennsylvania provides generous tax credits to eligible businesses that support Educational Improvement Organizations. Through Pennsylvania’s Educational Improvement Tax Credit (EITC) eligible businesses can fund education rather than pay a portion of its state taxes. Businesses make a gift to through the EITC program to an EITC approved educational organization, such as Fort Ligonier. The Department of Community and Economic Development (DCED) gives the business a tax credit equal to a percentage of the contribution. DCED determines the eligibility of businesses, application procedures and deadlines, and tax credit limits.
Is my business eligible to participate?
All business owners, companies, or corporations should share this information with their accounting department or financial advisors to evaluate the potential benefits. A business is eligible if subject to one or more of the following:
- Corporate Net Income Tax
- Capital Stock Franchise Tax
- Title Insurance Companies Shares Tax
- Insurance Premiums Tax
- Mutual Thrift Institution Tax
- Personal Income Tax of S corporation shareholders or Partnership partners
How can my company participate?
DCED determines the eligibility of businesses, scholarship organizations, and educational improvement organizations. Businesses need to complete a brief application to the DCED stating the amount they plan to contribute. The DCED will notify businesses if their applications are approved. After receiving approval, businesses have 60 days to make the contribution to Fort Ligonier (an approved educational improvement organization). The business must also submit a copy of the confirmation of contribution from Fort Ligonier to the DCED.
The form is available by calling the DCED at: 717-787-7120. More information can be found at this link http://www.newpa.com/find-and-apply-for-funding/funding-and-program-finder/educational-improvement-tax-credit-program-eitc and a business can download the application form by clicking EITC_Business_2012_F.pdf.
When should you apply?
Whether your business is a new or renewing applicant to the EITC program, be aware that the DCED allocates credits on a first-come, first-served basis. This is a competitive program, which means when the tax credits allocated for the year are exhausted, DCED can offer no additional credits and businesses cannot contribute through EITC during that year. According to the application: Applications for tax credits for program fiscal year 2016-17 (July 1, 2016 through June 30, 2017) will be accepted beginning July 1, 2016. Tax credit applications will be processed on a first-come-first-served basis by day submitted. All applications received on a specific day will be processed on a random basis before moving on to the next day’s applications. Applications will be processed until the amount of available tax credits is exhausted.”
Why should my company contribute to Fort Ligonier’s EITC program?
Businesses can reduce their tax liability and provide expanded educational opportunities for local students. This is a win-win situation for your company!