EITC

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Educational Improvement Tax Credit (EITC)

The EITC provides companies with a 75 percent tax credit for donations to a non-profit scholarship program. The tax credit increases to 90 percent if the company commits to making the same donations for two consecutive years. A business paying taxes in Pennsylvania can receive up to $300,000 in tax credits annually. Norwood-Fontbonne Academy is a scholarship recipient organization whose funding is directed through the BLOCS Program. This particular scholarship program assists all students who have applied for financial aid whose adjusted family income is no greater than $50,000 plus $10,000 for each dependent up to a total of $100,000 adjusted family income. Here is how the EITC works.

• Eligible businesses must submit to the Department of Community and Economic Development a completed application form found in Appendix I of the EITC business guidelines An eligible business that submits an application to the Department and that agrees to make a contribution to an organization whose name is set forth on the current list of scholarship organizations maintained by the Department shall be awarded Educational Improvement Tax Credits to the extent that such tax credits remain available for the fiscal year in which application is made.
• A business will be approved for a tax credit equal to 75 percent of its contribution(s) to listed organization(s), up to a maximum of $300,000 per taxable year. The tax credit may be increased to 90 percent of the contribution(s) made, up to a maximum of $300,000 per taxable year, if the business agrees to provide the same amount of contribution for two consecutive tax years. In order to receive and retain the 90% tax credit, the business must make the same amount of contribution in each of the two consecutive tax years.
• Tax credit applications will be processed on a first-come-first-served basis by day submitted. 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 processed until the amount of available tax credits is exhausted.
• Upon receipt of written notification from the Department that the business has been approved for tax credits, the business must make its contribution(s) to a listed scholarship organization(s) or educational improvement organization(s) within 60 days of the date of the notification letter, and must provide proof of the contribution to the Department within 90 days of the date of the notification letter. Proof of contribution may be a copy of a written acknowledgment from the organization, in accordance with EITC Program guidelines for organizations.Please designate Norwood-Fontbonne Academy in your letter to the BLOCS Program.
• Upon receipt of proof of contribution, the Department will notify the Department of Revenue to apply the tax credits against the appropriate taxes identified by the business in its application. The application of tax credits approved may not exceed the tax liability of a business for the tax year in which the contribution was made. The Department of Revenue will consider tax credits awarded under this program to be effective on the first day of the taxable year in which the contribution was made. The credit will then be used to offset (in full or part) the quarterly prepayment requirements and the remainder of the tax due for that taxable year.

Corporate Taxes That Can be Used for EITC Contributions

Norwood Fontbonne Academy • 8891 Germantown Avenue Philadelphia PA 19118
Phone (215) 247-3811 Fax (215) 247-8405

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