Brinker Simpson is one of the Delaware Valley’s leading certified public accounting and business-advisory firms. Based in Springfield, with additional offices in Media and Fort Washington, Brinker Simpson has been serving high net-worth individuals, businesses, and entrepreneurs within a wide range of industries for more than 25 years.
Many of Brinker Simpson’s clients have taken advantage of the Educational Improvement Tax Credit program. If you have questions about the EITC and your eligibility, contact the firm at 610-544-5900.
What is the Educational Improvement Tax Credit program?
The Educational Improvement Tax Credit program, or EITC, offers tax credits to eligible businesses contributing to a Scholarship Organization, Educational Improvement Organization, and/or a Pre-Kindergarten Scholarship Organization.
It provides companies with a 75 percent tax credit, up to a maximum of $750,000 per taxable year. If the company commits to making the same donation for two consecutive years, the tax credit will increase to 90 percent.
If the contributions are to a Pre-Kindergarten Scholarship Organization, a business may receive a tax credit equal to 100 percent of the first $10,000 contributed and up to 90 percent of the remaining amount contributed up to a maximum credit of $200,000 annually.
- Cash Paid to Educational Improvement Organization = $10,000
- PA Tax Credit Reduction (90 Percent of Contribution) = $9,000
- Net Federal Tax Reduction for Contribution (39.6 Percent Tax Rate) = $396
- Out of Pocket = $604
Applications are now being accepted
Beginning July 3, 2017, applications received by initial and returning applicants that previously submitted two-year commitment will be accepted. Applications will be accepted from Pass-through entities, such as S-Corporations, Partnerships, LLCs, etc., as well as C-Corporations. All information must be submitted electronically using DCED’s Single Application for Assistance.
Who is eligible?
Businesses authorized to do business in Pennsylvania that are subject to one or more of the following taxes: Personal Income Tax, Foreign Franchise Tax, Corporate Net Income Tax, and Other Taxes.
An approved company must provide proof to DCED within 90 days of the notification letter that the contribution was made within 60 days of the notification letter. Tax credits not used in the tax year the contribution was made may not be carried forward or carried back and are not refundable or transferable.
How to apply
Pennsylvania businesses can begin applying for EITC credits through DCED’s electronic single application system. DCED will no longer require applicants to mail the signed signature page. Tax credit applications will be processed on a first-come, first-serve basis by day submitted. All applicants received on a specific day will be processed on a random basis before moving on to the next day’s applications. Applications will be approved until the amount of available tax credits is exhausted.