Pennsylvania Educational Improvement Tax Credit (EITC) Program
In 2001, the Commonwealth of Pennsylvania established the Educational Improvement Tax Credit (EITC) program to encourage the business community to make contributions to benefit Pennsylvania low-income students in exchange for substantial tax credits. George School has been a recognized scholarship organization since the program’s inception. A series of gifts from companies has been received helping low-income Pennsylvania students to realize the dream of a George School education.
Financial aid is crucial to our mission of creating a student body that more closely reflects the society in which we live by distributing financial aid to students from diverse ethnic and socioeconomic backgrounds. A strong financial aid program enables George School to create an environment rich in diversity, which allows students to learn about other cultures and economic perspectives, and helps them develop constructive ways of understanding differences.
We hope these questions and answers will help you understand how you can help a low-income Pennsylvania resident receive the benefit of a George School education through your gift.
If you have any further questions please contact Emily Shaker of the George School Advancement Office at 215.579.6581 or annualfund@georgeschool.org, or visit the state's website.
Is the application process time consuming?
No, the process is quick and easy. You will need to complete a one-page application and have a conversation with your accountant.
RETURN TO TOP How large of a gift could I direct to George School to take full benefit under this program? You will need to know how much your company expects to pay in corporate taxes each year to the state. This figure will help you determine how much can be directed to George School.
RETURN TO TOP Is there a cap on gifts? Yes, businesses paying Pennsylvania corporate taxes can direct up to $222,200 of their corporate taxes to George School under this program.
RETURN TO TOPWhat is the deadline for participation? The state works on an annual calendar, which starts July 1 of each year. Since this is a first-come first-served program, filing the state application early will help ensure you can participate.
RETURN TO TOPAre there any federal tax benefits? There are possible federal tax benefits that could reduce your gift to net zero out-of-pocket cost. You will need to discuss this with your accountant.
RETURN TO TOPCould my business contribute? Yes, if your company expects to pay:
- PA Corporate Net Tax
- Capital Stock Franchise Tax
- Bank and Trust Company Tax
- Title Insurance Tax
- Insurance Premiums Tax or Mutual Thrift Institutions Tax
Most profitable businesses will pay one or more of these taxes.
RETURN TO TOPHow do I best take advantage of this opportunity? By committing to the program for two years, your tax credit will be 90 percent of your contribution. If you can commit to one year only, the credit will be 75 percent of your contribution.
RETURN TO TOPIf my business makes a contribution to George School, am I automatically eligible for the tax credit? No. The state puts a limited amount of funds aside to be used each year. Your business must apply to the state on a first-come first-serve basis to be eligible.
RETURN TO TOPIf I am approved by the state, when do I have to make my contribution? The state will send you notification of being approved for the tax credit. You have 60 days from the date of that letter to forward your gift to George School.
RETURN TO TOPHow do I get the tax credit for my contribution? Once George School receives your gift, the school will send you a letter officially recognizing your payment. In turn, you will forward this acknowledgement letter to the state. The state will process the proper tax credit.
RETURN TO TOPWhen may I use the credit? The credit will be used to offset (in full or part) the quarterly requirements and the remainder of the tax due for the year in which the tax credit is approved.
RETURN TO TOPWho determines what students will receive my contribution? The George School Admission Office determines which students are admitted to the school. Each student may apply for financial aid. The school contracts with an independent organization to help best determine the appropriate level of aid to be awarded to qualifying students. EITC-eligible students must be Pennsylvania residents and their families must make a household income of less than $50,000 with an allowance of $10,000 for each additional dependent. For example, the income eligibility limit for a family with two children would be $70,000.
RETURN TO TOPHow many students can be served by George School under this program? In 2004-2005, fifty-two Pennsylvania students at George School met the EITC eligibility requirements. Their aid packages totaled $1.1 million.
RETURN TO TOPWill my contribution go towards scholarships only? Eighty percent of your contribution must go toward scholarships. The other 20 percent can be used by George School as unrestricted operating income.
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