Corporate PA Tax Credit Donations

To stay current on CSFP and its scholars, please click here.

Did you know that your business can help make a great investment in the life of a Philadelphia child at little or no cost?
 

Your business can contribute to CSFP by reallocating its PA tax liability through the PA Education Improvement Tax Credit Program (EITC) and the PA Opportunity Scholarship Tax Credit Program (OSTC).*

Both the EITC program and the newer OSTC program provide companies with a 90% Pennsylvania tax credit for donations to designated scholarship organizations for a two-year commitment and 75% Pennsylvania tax credit for a one-year commitment.  By combining the EITC and/or the OSTC with deductions on Federal and PA tax liabilities for gifts to charitable organizations, the program can be virtually cost-free to donors.

There are currently millions in tax credits available on a first-come, first-served basis for the OSTC program. Applications must be completed online at: www.newpa.com/OSTC by June 30th (a new bank of OSTC tax credits will become available on July 1).

The EITC tax credit bank re-opens for new applications on July 1st. There are some changes for 2013 to the program. First, EITC corporate donors will now receive an EITC tax credit application advantage over new corporate applicants. Specifically, if you are an EITC donor company that has just completed its second year cycle and are applying for a new two-year award cycle, your company’s new application can now be submitted anytime from May 15 through June 30, 2013. DCED will award EITC tax credits to all renewing companies prior to opening the tax credit bank to new corporate applicants on July 1st, 2013.

Other changes, to both EITC and OSTC, that will take effect on July 1st is an increase in the maximum tax credit amount allowable for companies from $400,000 to $750,000 per year ($1.5 million maximum in tax credits for participation in both programs). Finally, all new EITC applications must also be completed and filed online at: www.newpa.com.

To date, more than 2,800 businesses have redirected more than $350 million in tax dollars to educational organizations.

*Please be advised that Children’s Scholarship Fund Philadelphia is the only Pennsylvania-based partner program of the Children’s Scholarship Fund (CSF, a national organization based in New York, established in 1998).  Please also be advised that “The Children’s Scholarship Fund of Pennsylvania” is not affiliated with, and has never been a program partner to, either CSFP or CSF.

About the OSTC & EITC Programs

PA Opportunity Scholarship Tax Credit Program (OSTC) is NOW available to businesses. CSFP will award OSTC scholarships to K-8th grade Philadelphia students residing within the boundaries of the lowest 15% of low-achieving public schools. The awards will enable these at-risk children to attend performing private and parochial schools.

The bank of available credits is $50 million and will be allocated on a first-come, first-served basis. Only online applications will be accepted.  Apply through DCED’s electronic single application system.  

What is the Opportunity Scholarship Tax Credit Program? 

Similar to the easy to use, longstanding Pennsylvania Education Tax Credit Program (EITC), businesses in Pennsylvania that pay any of the following taxes: Corporate Net Income Tax, Capital Stock Franchise Tax, Bank and Trust Company Shares Tax, Title Insurance Companies Share Tax, Insurance Premiums Tax or Mutual Thrift Institution Tax, can donate to Children’s Scholarship Fund Philadelphia and receive a tax credit.

How much of a tax credit can I get for my business? 

The tax credit is 90% (against taxes owed) for a two-year commitment of equal funding or 75% credit for a one-year commitment. Eligible companies may take up to $400,000 in tax credits under each program. Please note that on July 1st, 2013 the maximum allowed under both the PA EITC program and the PA OSTC program will increase to $750,000 each. Companies may then take a total of $1,500,000 in 2013 credits by utilizing both tax credit programs.

What scholarship organizations can businesses contribute to in order to receive the credit?

Organizations eligible to receive OSTC or EITC contributions must be a recognized 501 (c) iii and distribute at least 90% of their annual receipts to eligible students. Additionally they must register with the Department of Community and Economic Development (DCED) and be listed (on a list of eligible organizations).

Why choose Children’s Scholarship Fund Philadelphia to receive your OSTC or EITC dollars?

With more than 175 participating schools in our program and 3,500 students, Children’s Scholarship Fund Philadelphia is the largest, most diverse and efficient provider of K-8th grade need-based scholarship support in Pennsylvania. CSFP has no political, school or religious affiliation.

What is the process for businesses to receive the OSTC tax credit?

Businesses can apply up to June 30, 2013 for OSTC credits that are issued on a first-come, first-served basis.  New OSTC credits will become available on July 1st. New EITC applications can be filed starting July 1st, but companies that are renewing a two-year commitment or are in the middle of a two-year commitment and wish to apply for additional EITC credits, can file their online application starting May 15-June 30, 2013. After a business applies online, it must mail in a signed form. Once approved, DCED will issue qualifying businesses a tax award letter. Companies will then have 60 days from receipt of the award letter to make a donation to qualified scholarship organization.

Sample OSTC/EITC Calculation:

For more information about OSTC or EITC, please contact:
Nicole Tell, VP of Development, by email at ntell@csfphiladelphia.org or by phone at 215.606.1874.