The New School of Lancaster

YOUR BUSINESS, EMPLOYER OR PARTNERSHIP CAN HELP PROVIDE FINANCIAL AID AT THE NEW SCHOOL OF LANCASTER

Pennsylvania Educational Improvement Tax Credit

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.

House Bill 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 in tax credits annually.  More importantly, the EITC provides children and families with a choice in their education and a chance in life.

Scholarship Organizations provide scholarships to children to attend the schools of their choice.

Educational Improvement Organizations fund innovative programs in public schools across the Commonwealth.

Pre-K Scholarship Organizations fund scholarships to children so families have the ability to choose the pre-K that best fits the needs of their child.

Q:  What are Educational Improvement Tax Credits?

A:  The EITC is a tax credit for businesses that make donations to scholarship or educational improvement organizations. Scholarship organizations award scholarships to children across Pennsylvania to assist them in attending the
schools of their choice. Educational improvement organizations fund innovative projects in public schools across the Commonwealth. The EITC program is administered by the Department of Community and Economic Development (DCED) on a first-come, first-served basis.

Benefits for Businesses

Companies can effectively get a dollar-for-dollar reduction in the tax payment required for a business. The EITC is a tax credit of the amount of the donation made. If a company has not maximized their percentage of charitable donations, they can also deduct their contribution on their federal tax return. Of course each company’s tax situation is different, so you should consult your tax preparer.

Q:  Why are tax credits more attractive than a standard charitable donation?

A:  While deductions reduce your amount of taxable income, tax credits reduce your actual tax bill, dollar-for-dollar. Tax credits are utilized AFTER your tax liability is established.

Q:  What is the process for businesses to receive the tax credit?

A:  Businesses send the Department of Community and Economic Development (DCED) a one-page application for the tax credit, which is available online at http://www.newPA.com/EITC  (Under guidelines, click on eitc business 2012 pdf link). If there are funds available and the company does not owe back taxes, DCED will send an approval letter to the applicant. The company then has 60 days to make its donation(s) and then an additional 30 days to send proof of the donation(s) to DCED. This entire process must take not more than 90 days from the date of their approval.

2012 EITC Applications and Guidelines

Businesses authorized to do business in Pennsylvania, who are subject to one or more of the following taxes, are eligible to participate in the EITC Program: 

• Corporate Net Income Tax
• Capital Stock & Franchise Tax
• Bank and Trust Company Shares Tax
• Title Insurance Companies Shares Tax
• Insurance Premiums Tax
• Mutual Thrift Institutions Tax
• Personal Income Tax - subchapter s-corporations and other “pass-through” entities will be able to use the tax credit against the shareholder, member or partners PA personal income tax.

Year 1 of 1 C-corporations and Year 1 of 2 C-corporations can submit their applications beginning on July 2.

Year 1 of 1 S-corporations and Year 1 of 2 S-corporations can submit their applications beginning on July 9.

Year 2 of 2 C-corporations and S-corporations can submit their applications on May 15.

For complete instructions and a 2012 application visit:  http://www.newPA.com/EITC (Under guidelines, click on eitc business 2012 PDF link)

For more information, please contact our Development Director, Cynthia Charles Eder, .(JavaScript must be enabled to view this email address), 717-397-7655 ext. 170;

The New School of Lancaster thanks the following businesses who have contributed to the school’s financial aid fund through the PA Educational Improvement Tax Credit Program:

2011

• Anonymous Donor One
• Anonymous Donor Two
• Eastern Alliance Insurance Company
• Fulton Bank
• Graystone Bank
• Highmark Casualty Insurance Company
• High Company LLC
• Kegel’s Produce
• Metro Bank
• North Lime Holdings
• Union Community Bank

2010

• Anonymous Donor One
• Eastern Alliance Insurance Holdings, Inc.
• Fulton Bank
• High Company, LLC
• Metro Bank
• Anonymous Donor Two
• Tippetts/Weaver Architects, Inc.

2009

• Anonymous Donor
• Benecon Group
• Bravo Foundation
• Eastern Insurance Holdings, Inc
• Faith Builders Scholarship Fund
• Fulton Bank
• High Company, LLC
• Metro Bank
• North Lime Holdings, Inc.
• Oakmont Capital Management, LLC

2008

• Pyro-Stop, LLC
• Advanced Specialty Contractor, LLC
• IREX Corporation
• Fulton Bank
• Commerce Bank
• Bravo Foundation
• Montessori Academy of Chambersburg, Inc.

2007

• Graystone Bank
• Union National Community Bank
• Pyro-Stop, LLC
• IREX Corporation
• Advanced Specialty Contractor, LLC

2006

• Gerbert Limited
• Advanced Specialty Contractor, LLC
• Fulton Bank
• IREX Corporation
• Union National Community Bank

2005

• Armstrong Ventures, Inc.
• Sovereign Bancorp