What is EITC?
The Educational Improvement Tax Credit (EITC) provides companies with a 75% tax credit for donations to a non-profit scholarship or educational improvement organization, such as a school. The tax credit increases to 90% if a commitment to making the same donations for two consecutive years is made. A business paying taxes in Pennsylvania can receive up to $750,000 in tax credits annually. EITC provides low-income Pennsylvania children and families with much needed tuition assistance.
What is OSTC?
Modeled after the popular EITC program, the Opportunity Scholarship Tax Credit (OSTC) program provides tuition assistance to children who live within the attendance boundaries of Pennsylvania’s worst performing 15% of schools. Just like the EITC program, the OSTC program awards Pennsylvania businesses a tax credit of 75% if the gift is made for one year or 90% if the company commits to making the same donations for two consecutive years. OSTC funds are available in addition to any credits received under the EITC program and you can apply for both programs at the same time with a short application.
Our Administrative Partners at BLOCS
SPS offers tuition assistance annually to approximately 25% of families. Many of these families are in the boundaries of an underperforming school district, which gives us flexibility in accepting EITC or OSTC. We, along with many local independent schools, partner closely with Business Leadership Organized for Catholic Schools (BLOCS) to manage and receive our EITC/OSTC funds. BLOCS is an experienced, long-standing participant in the program and we are grateful for their assistance.
Eligibility and How to Apply
EITC and OSTC are open to any business that pays PA taxes and individuals making over a certain income threshold (approximately $165,000). There is generally a minimum capital commitment upfront of $5,000 per member, however the overall out of pocket cost starts at around $315, after the tax credits and reductions are realized. See sample tax calculations (pulled from the BLOCS website) below: