Educational Improvement Tax Credit
The Pennsylvania Department of Community and Economic Development awards businesses with tax credits for making charitable contributions to an education improvement organization such as Big Brothers Big Sisters of the Laurel Region. Businesses can get a tax credit of up to $200,000 on their Pennsylvania corporate tax liability.
How does it work?
A tax credit equal to 75% of the total charitable contribution may be granted to a business providing proof of a donation during one taxable year. A tax credit of 90% of the total contribution may be granted if the business provides written commitment to contribute the same amount for two consecutive years. In many cases, claiming both Pennsylvania state tax and federal tax deductions could mean that your donation would result in nearly 100% tax savings for your business in the amount donated. The credit cannot exceed $200,000 per business annually, and it must be applied in the taxable year in which the contribution is made.
How does BBBSLR benefit from your donation?
Big Brothers Big Sisters of the Laurel Region is recognized as an “Educational Improvement Organization” that enhances both the curriculum and the academic environment within our schools. Contributions through the EITC program go directly to our School-Based Mentoring Programs where high school mentors support improvements in academic performance and social skills of the elementary students.
How do I apply?
All you need to do is work with your company’s controller or accountant to determine whether your business is eligible and file a simple, one-page application. A limited number of tax credits are available each year, and not every business that applies is approved or eligible. Visit www.newpa.com for more information.
Which businesses are eligible?
To be eligible for EITC, a business must be authorized to do business 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, or Mutual Thrift Institution Tax.
When is the deadline for applications?
The PA Department of Community and Economic Development begins processing applications on July 1 of each year, but tax credits are awarded on a first-come first-serve basis. And all available EITC funds are typically exhausted by early September of each year. We urge all businesses applying for EITC to fax their applications (717-772-3581) to the PA Department of Community and Economic Development on July 1.
Do I have to reapply each year?
Applications for businesses that are applying for a second year of tax credits should be faxed beginning May 1 but no later than May 15. Applications for renewal will be processed first.
What happens once my business is approved?
You will have 60 days to make your contribution to Big Brothers Big Sisters of the Laurel Region. We then submit proof of your contribution to you for submittal to the PA Department of Community and Economic Development. Your tax credit is effective on the first day of the taxable year in which the contribution was made.
For more information:
Please contact BBBSLR at 724-837-6198.
You may also contact the PA Department of Community and Economic Development:
Phone: 717-787-7120
E-mail: tknorr@state.pa.us
Fax: 717-772-3581
Website: www.newpa.com