A Win-Win: EITC Gives Tax Breaks to Businesses, Scholarships to Students
The Educational Improvement Tax Credit (EITC) program provides an attractive economic incentive for businesses while providing K-12 educational options to low- to moderate-income families.
How It Works For Businesses
Businesses apply through the state to receive up to a 75 percent tax credit on up to $300,000 annually. The EITC program enables companies to support local nonprofit charities instead of sending tax dollars to Harrisburg.
The Philadelphia Foundation has been approved to receive these charitable contributions by the Department of Community and Economic Development.
The credits can apply against the corporate net income tax, the capital stock franchise tax, the bank and trust company shares tax, the title insurance company shares tax, the insurance premiums tax and the mutual thrift institution tax.
How It Works For Students
The program awards tuition scholarships to students from grades K-12 who come from low- to moderate-income families and attend non-public schools in the state.
It provides valuable options to families whose ability to choose the most appropriate environment for their child may be limited by income. It also helps all those in private school classrooms by widening the diversity of perspectives and experiences among the students enrolled.
The Philadelphia Foundation is partnering with six non-public schools to administer these funds for the 2010-2011 year. The schools are: Archbishop Prendergast High School; Greene Street Friends School; Homesburg Christian Academy; St. Martin of Tours Elementary School; St. Donato Elementary School and St. Martin De Porres Elementary School. Students will be selected for funding by each school’s administration in accordance with pre-determined criteria established by the state.
In addition, The Philadelphia Foundation has longstanding partnerships to distribute EITC funds to Cornerstone Christian Academy, Frankford Friends School, Goshen Friends School and United Friends School.
Who Has Participated
Over 3,000 companies across Pennsylvania have contributed to the program, aiding more than 20,000 students.
The Philadelphia Foundation has awarded more than $1 million through participating companies including Wal-Mart Stores East, SEI Investments, Priority Express, ACE-INA, PNC Bank and Waste ManagementFunds contributed through the State’s EITC program have been used to fund the Community Scholarship Fund.
How The Philadelphia Foundation Helps
After a corporation has been approved to receive the credit, the Philadelphia Foundation manages the granting of scholarships to non-public K-12 schools or students in Bucks, Chester, Delaware, Montgomery and Philadelphia counties. The Foundation:
- Assists businesses in locating qualifying recipients.
- Processes the scholarship applications.
- Notifies the recipients and other applicants.
- Handles the financial transfer through the school to the student.
- Completes the gift acknowledgement form required by the state.
For more information about how businesses can work with The Philadelphia Foundation and the EITC program, please contact Sylvia Spivey, Scholarship Manager, 215-863-8121.
How Businesses Can Apply
The tax credits are available on a first-come, first-served basis until the credits are used up. Businesses are encouraged to apply early.
Visit the state web site about the program for forms and guidelines.