Educational Improvement Tax Credit Program

WHAT IS THE EDUCATIONAL IMPROVEMENT TAX CREDIT PROGRAM ?

The EITC Program enables businesses to use their tax dollars to support non-profit school foundations. The Program is administered by the Pennsylvania Department of Community and Economic Development (DCED). The EITC Program authorizes tax credits (not deductions) to Companies which make contributions to Educational Improvement Organizations such as LEAF. Instead of sending their tax dollars to Harrisburg, companies which qualify can redirect those tax dollars to support the Lehighton Area School District through the Lehighton Education and Athletic Foundation.


WHAT BUSINESSES QUALIFY ?

Businesses that pay any of the following taxes qualify for the EITC credits:
Capital Stock/Foreign Franchise Tax
Corporate Net Income Tax
Bank and Trust Company Shares Tax
Title Insurance Companies Shares Tax
Insurance Premiums Tax
Mutual Thrift Institution Tax
Gross receipts Tax
Tax under the Insurance Company Law of 1921
Personal Income Taxes from S corporation shareholders or Partnerships


HOW DO BUSINESSES APPLY FOR THE TAX CREDIT ?

The application form and information can be obtained by using the Department of Community and Economic Development’s web site (click here).

The Business should complete the online application by submitting it to the PA DCED web site.

The complete instructions on how to submit an application for the program for businesses can be found here.
 
You may also contact DCEC at (717) 787-7120.
 
The application must be completed online. The business is required to submit their monetary contribution to LEAF within 60 days. LEAF will provide the business with an acknowledgement of its contribution.

The business submits its acknowledgement from LEAF to DCED. Then, DCED communicates with the PA Dept. of Revenue, and the amount of the tax credit is applied to the business tax account. The credit is taken as a payment of taxes on the annual state tax filing of the business.


HOW MUCH OF A TAX CREDIT MAY A BUSINESS RECEIVE ?

The tax credit is 75% - 90% of the taxes owed. In order to gain the maximum amount of the tax credit (90%) a business must provide a written two year commitment to the educational foundation. If a company has not maximized its percentage of charitable donations, it may also deduct their contribution on its Federal Tax Return. Eligible companies may take up to $300,000 in tax credits in one year.


EXAMPLES :

If a company owes $25,000 in PA taxes and commits to make a donation to LEAF for one year, that company may contribute 75% of $25,000 to LEAF or $18,750. The remaining amount of the taxes, $6,250, is paid to the Commonwealth of PA.

If a company owes $25,000 in PA taxes and commits to make the same donation to LEAF for two consecutive years, then it may contribute 90% of $25,000 to LEAF or $22,500. The remaining amount of the taxes, $2,500, is paid to the Commonwealth of PA for two consecutive years.

A contribution of any amount is welcome. Each gift should be a great source of pride for the business owners and their employees in knowing that their tax dollars are being utilized locally and that it is the students in the Lehighton Area School District t who are benefiting from them. In addition, by participating in the EITC program a business accumulates the positive public relation benefits that accrue whenever a company supports a worthy cause in its marketing area.


CONTACT PERSON

If you have any questions on the EITC program please contact:

Tim Tkach
Lehighton Education and Athletic Foundation
ttkach@lehighton.org 

Links
Approval letter for the Lehighton Education and Athletic Foundation
Educational Improvement Organization Guidelines


PA DCED CONTACT INFORMATION

Department of Community and Economic Development
The Educational Improvement Tax Credit Program
Center for Business Financing – Tax Credit Division
400 North Street, 4th Floor
Commonwealth Keystone Building
Harrisburg, PA 17120-0255
Telephone: (717) 787-7120
Fax: (717) 772-3581
E-mail: ra-eitc@pa.gov

 
 
 
Lehighton Education & Athletic Foundation
P.O. Box 370
Lehighton, Pa 18235