EITC and OSTC State Tax Credits
The Commonwealth of Pennsylvania offers two tax-credit programs that make it possible for businesses to redirect their tax dollars to Penn Charter for financial aid. The application process is easy, and the benefits to the school and to deserving students are significant.
What are EITC and OSTC?
Enacted by the Pennsylvania legislature in 2001, the Educational Improvement Tax Credit (EITC) provides a tax credit to businesses that pay Pennsylvania's corporate income tax for contributions to scholarship organizations that give private-school scholarships to eligible children.
In August 2012, Pennsylvania created a second program – the Opportunity Scholarship Tax Credit (OSTC) – to offer further support for students whose neighborhood public school is low-achieving.
The EITC and OSTC programs enable a Pennsylvania business to direct up to $750,000 of its Pennsylvania state tax dollars directly to Penn Charter's scholarship program. Tax credits are given for 75 percent of a one-year gift and 90 percent of gifts given in two consecutive years.
Corporations and individuals may also work with BLOCS to provide charitable donations to Penn Charter. BLOCS, or Business Leadership Organized for Catholic Schools, bridges the business community and schools to expand funds available for financial aid by facilitating EITC and OSTC gifts. BLOCS supports independent schools, as well as Catholic Schools, and works closely with Penn Charter.
Some individuals who pay Pennsylvania income tax are able to designate part or all of their tax liability via a "special purpose entity," or SPE, to make a gift to financial aid at Penn Charter. SPEs are a vehicle for non-business owners to participate in philanthropy via EITC or OSTC. Penn Charter has two SPEs, and can receive gifts of financial aid from larger organizations who facilitate tax-credit gifts on behalf of many individuals for multiple schools.
Eligible businesses must be authorized to operate in Pennsylvania and subject to one or more of the following taxes: Corporate Net Income Tax; Capital Stock Franchise Tax, Bank and Trust Company Shares Tax; Title Insurance Companies Shares Tax; Insurance Premiums Tax; Mutual Thrift Institution Tax and Personal Income Tax of S Corporation Shareholders, or partners in a general or limited partnership. Individuals who wish to give via SPE must have accredited investor status and have a Pa. tax liability.
Benefits to Penn Charter
Penn Charter seeks to be a richly diverse school community: racially, religiously, economically, ethnically and socially. In our curriculum, we work to widen our embrace of a plurality of cultures and to celebrate the voices of both women and men. The EITC and OSTC programs offset financial aid expenses, helping Penn Charter maintain and increase its diversity.
In the 2018-19 school year, more than $2.1 million was gifted to Penn Charter through the EITC and OSTC programs, supporting more than 170 Penn Charter students. This money significantly alleviated the school's financial aid budget and made it possible to fund other projects and improvements throughout the school.
Businesses may simply complete the online application at newpa.com. Two to three weeks later, you will hear whether you have been approved to join the program. Individuals wishing to give via SPE can contact Jack Rogers to determine the best option for directing their gift to Penn Charter.
For more information and application assistance, please contact Jack Rogers at 215-844-3460, ext. 111 or email@example.com.