Issue: EITC


Educational Improvement Tax Credit (EITC)

Educational Improvement Tax Credit (EITC) The Educational Improvement Tax Credit (EITC) program was created to enhance the educational opportunities available to all students in Pennsylvania and focuses on providing scholarships to children in low-income families. The EITC program, which went into effect on July 1, 2001, as Act 4, requires the Department of Revenue to give Pennsylvania businesses tax credits if they make a contribution to a scholarship organization or an educational improvement organization. To qualify for this tax credit, businesses must donate cash, personal property, or services to a scholarship or educational improvement organizations. The amount of tax credit that a business receives is dependent on the type of entity to which they made a donation. 
 

EITC -- The original tax credit program

 

EITC 2.0 tax credit program – Act 85 of 2012

Act 85 of 2012 amended the PA Tax Reform Code to expand the original EITC program from$75 million to $100 million. It also provided $50 million for the creation of a new "Opportunity Scholarship Tax Credit Program" (EITC 2.0) to provide tax credits to fund larger scholarships for low and mid-income students residing in the attendance boundary of an underperforming school to attend participating private schools or public schools. The EITC 2.0 program applies to the lowest performing 15% of elementary and secondary public schools.