Have you heard of Pennsylvania's Educational Improvement Tax Credits?

 

What are PA Educational Tax Credits?

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These are tax credits that allow you to redirect your PA state income tax liability to scholarships that benefit qualifying children. If you choose to participate in the program and direct your credits to Conestoga Christian School (PG电子游戏) those dollars will help fund the tuition assistance offered to many PG电子游戏 families. 

 

Who can participate?

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• Pass-through entities, such as S-Corporations, Partnerships, LLCs, LLPs, C-Corporations

• Qualifying individuals

• Sole proprietorships are not eligible to participate in the programs

 

In the past, only certain business entity types could take advantage of this opportunity. Recently the Pa Legislature passed a bill that allows qualifying individuals to participate in the program through what is known as a Special Purpose Entity (SPE). 

 

     Eligibility for joining an SPE:

• Legal entities and individuals (including spouses) who are owners or employees of a for profit LLC, partnership, or corporation.

• Individuals who own stock in any public company registered to pay tax in PA.

• Most SPEs are asking members for a 2 year commitment.

• Minimum contribution depends on the SPE. For example PennGift's minimum annual contribution is $500, Faith Builders minimum annual contribution is $3,000.

• Information on two specific SPE’s PG电子游戏 benefits from:​

  • Faith Builders Scholarship Services SPE

  • PennGift Foundation

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Who benefits?

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Christian families longing to provide a Christian education for their children but need financial help to do so benefit from this program.

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How does this benefit me?

• Increase your charitable contributions at minimal cost to you.

  • If you make a 1 year commitment you will receive a 75% PA state tax credit.

  • If you make a 2 year commitment you will receive a 90% PA state tax credit.

• Direct your state tax dollars to an organization you believe in, such as PG电子游戏.

• Use your resources to further God's kingdom.

 

Example: James is in the 37% tax bracket and does itemized deductions. James agrees to contribute $3,000 via the Faith Builders SPE to his children’s school, which participates in the EITC Tax Credit program. He agrees to a two year commitment and receives a 90% PA Tax Credit and receives a $111 federal tax benefit contribution credit. With the EITC credits, James’ net out-of-pocket will be $189.

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How do I apply for the credit?

• There are two ways:

Option 1: Complete a PA Department of Community and Economic Development (DCED) application: A business that is an S-Corporation, Partnership, LLC, LLP, or C-Corporation can apply directly for the credits by completing and submitting an application to the PA Department of Community and Economic Development (DCED). 

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Typically the application process opens July 1 for new participants, and repeat businesses that have previously made a 1 year commitment. As awarding of credits is limited and available on a first-come basis it is key to submit your application on the day the process opens.

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Click to access the PA Dept of Community & Economic Development.

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Option 2: Join a Special Purpose Entity: Qualifying individuals apply for the credit through a Special Purpose Entity (SPE). Qualifying businesses can also choose to apply for the credit through an SPE. As the application date for participation in SPEs varies you should check with your SPE of choice for their specific application criteria.