EITC and OSTC
About EITC and OSTC Programs
The Educational Improvement Tax Credit program (EITC) allows qualified businesses to fulfill their state tax burden while supporting financial aid at the Waldorf School of Philadelphia.
The Opportunity Scholarship Tax Credit program (OSTC) allows qualified businesses to fulfill their state tax burden while supporting low-income students who reside in low-achieving school districts in Pennsylvania.
The Pennsylvania Educational Improvement Tax Credit Program (EITC)
The Commonwealth of Pennsylvania offers a unique opportunity for businesses in the state to reduce tax liability by contributing to registered scholarship organizations. Gifts to the Waldorf School of Philadelphia can generate a tax credit equal to 75% of the contribution, up to a maximum of $750,000 annually. Two-year commitments receive a 90% tax reduction up to a maximum of $750,000 each year.
For example, if you donate $10,000 to the Waldorf School of Philadelphia each year for two years, you will receive a tax credit of $9,000 per year, plus the ability to claim $1,000 as a charitable deduction.
The Pennsylvania Opportunity Scholarship Tax Credit Program (OSTC, formerly known as EITC 2.0)
Due to the high demand for EITC tax credits, the Commonwealth of Pennsylvania created a similar program in 2012. Modeled after the popular EITC program, the Opportunity Scholarship Tax Credit (OSTC) program provides financial aid support to children who live within the attendance boundaries of Pennsylvania's worst performing 15% of schools. OSTC funds are available in addition to any credits received under the EITC program. If you qualify for EITC, you also qualify for OSTC. A low-achieving school is defined as a public elementary or secondary school ranking in the bottom 15 percent of their designation as an elementary or secondary school based upon combined math and reading Pennsylvania System of School Assessment (PSSA) scores.
When should businesses apply?
May 15 – Business applicants who have fulfilled their 2-year commitment and wish to reapply to renew their 2-year commitment.
May 15 – Businesses who are in the middle of their 2-year commitment.
July 3 – All other businesses.
Is my Business Eligible?
If your business is authorized to operate in Pennsylvania and pays one of the following taxes, you can register to be eligible for the Pennsylvania Educational Improvement Tax Credit Program (EITC)
- Corporate Net Income Tax
- Capital Stock Franchise Tax
- Bank and Trust Company Shares Tax
- Title Insurance Company Shares Tax
- Insurance Premiums Tax
- Mutual Thrift Institution Tax
How can my Business Register?
The one-page application is now available online from the Pennsylvania Department of Community and Economic Development here. The website provides further information on the program as well as the application form. Additionally, you can call the Department of Community and Economic Development at (717) 787-7120 for a copy of the application.
Pennsylvania businesses can begin applying for Opportunity Scholarship Tax Credits through DCED’s electronic single application system, found here. The business application guide explains the process of applying.
Please note that tax credit applications for both programs are processed on a first-come, first-served basis by day submitted. It is therefore important to submit your application on the first day your business becomes eligible. All applications 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.
Once eligible, a business has sixty (60) days to make its contribution to the Waldorf School of Philadelphia. 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 is not refundable or transferable.