About the EITC Program

On May 7, 2001, by an overwhelming bi-partisan majority, Pennsylvania made history by becoming the first state to pass an education tax credit aimed at corporations.

HB 996, the Educational Improvement Tax Credit (EITC), provides companies with a 75% tax credit for donations to a non-profit scholarship or educational improvement organization. The tax credit increases to 90% if the company commits to making the same donations for two consecutive years. A business paying taxes in Pennsylvania can receive up to $300,000 (increased from $200,000 July 2008) in tax credits annually. More importantly, the EITC provides children and families with a choice in their education and a chance in life.

The Pre-Kindergarten (Pre-K) Tax Credit was established in 2003 and provides companies with a tax credit for donations to a non-profit Pre-K scholarship organization. A 100% tax credit is offered on the first $10,000 of a donation and a 90% tax credit for every dollar up to $150,000 (increased from $100,000 July 2008). Companies may participate in both the EITC program and the Pre-K tax credit program.

Due to the current budget crisis in Pennsylvania, the EITC program has been cut by 20% ($15 million) in the 2009-2010 budget year and another 13% cut ($10 million) is proposed for the 2010-2011 budget year. That equates to:

• $38 million 2009-2010 budgeted tax credits available for K – 12 and $6.4 million for Pre-K
• $33.4 million 2010-2011 proposed tax credits available for K – 12 and $5.3 million for Pre-K
  

In July 2008, the Legislature opened the EITC program to include all Subchapter S corporations and other ‘pass through’ entities including Limited Liability Companies, Limited Partnerships and General Partnerships giving many more businesses across the Commonwealth the opportunity to support Catholic education in their communities.

Over 40,000 children across Pennsylvania are benefiting from EITC scholarships and countless numbers of children in public schools are benefiting from innovative programs that would have likely have gone unfunded.

Learn more about how the EITC program can work for your business by downloading this power point presentation.