What tax credit programs are available in PA for my business?
The Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) programs provide businesses that pay PA taxes with a tax credit for their donations to nonprofit Scholarship or Education Improvement Organizations such as BLOCS.
A one-time donation for K to 12 students can earn a 75% tax credit for a 1 year commitment or a 90% credit for a two year commitment. A one-time donation for Pre-K students can result in a 100% tax credit for the first $10,000; and a 90% tax credit for the remainder up to $200,000.
What is the maximum amount a business can donate and receive a tax credit through EITC & OSTC?
Businesses may donate a maximum of $750,000 per year through the EITC & OSTC programs.
Can a business that receives a state tax credit through EITC or OSTC still take a charitable deduction for their donation on both their state and federal tax returns?
Yes. A business that receives a state tax credit through the EITC/OSTC program may still take a charitable deduction for their gift on both their federal and state tax returns as allowed by law. This is in addition to the EITC & OSTC tax credits they will receive against their state tax liability. Please consult your tax advisor on specifics to your business.
How does my company benefit by utilizing the EITC and OSTC Tax Credits?
These programs allow the business to direct where a portion of their tax dollars are spent. These are dollars that your business would already be paying to the state of Pennsylvania. It also allows the business to support the schools and local community in the footprint of their business.
How does a school benefit?
Your donation plays a vital role in allowing all students the opportunity to attend an Archdiocesan school regardless of race, religion, or ability to pay. The School then designates which qualified students are provided assistance.
How much will a donation to BLOCS cost my business if we utilize the tax credits available?
Approximately 6.5 cents on the dollar, or $650 for a $10,000 donation.
What is the timing of when we have to make our contribution and what is the approval process?
Any new business can apply for tax credits starting July 1 for the current year.
How soon will my donation be distributed?
Donations received prior to June 30 will be allocated for the fall semester of that school year. Monies received after July 1 will be distributed for fall of the following school year.
Can I donate directly to a student?
You cannot designate your donation to a specific student. You do however, have the option to designate the money to a specific school. Businesses may designate up to 100% of their donation, and LLC members may designate up to 75% of their donation. The schools, not BLOCS, each have the ability to designate funding to qualified students.