St. Timothy School has established a scholarship program to assist area students in paying for a Catholic school education. Local businesses can help themselves and the parish by applying for the Educational Improvement Tax Credit (EITC), a Commonwealth of Pennsylvania program that provides tax credits to eligible businesses that contribute to a scholarship organization.
The Educational Improvement Tax Credit program is a way for businesses to direct funds that would otherwise go to taxes towards the private education of Pennsylvania's students. Not only does this improve a student's chance to receive the education of their choice and attend schools like St. Timothy, but it also results in a tax credit for the business involved and the money donated stays in the local community. Businesses will receive a 90% tax credit for a two-year commitment to the program, up to $200,000 annually. A 75% tax credit is given to those who choose to participate for one year. Basically, the EITC program works as follows. A business owner contributes money to the scholarship program and then receives up to 90% of the money back in the form of a tax credit.
How often have you had the opportunity to choose how your state tax dollars are spent? Rarely, if ever. All that has changed because of the Educational Improvement Tax Credit Program (EITC). The EITC provides a way for businesses to direct funds that would otherwise go to taxes toward the private education of Pennsylvania's students.
For many local families the cost of financing a non-public school education is a tremendous struggle. For example, tuition for students in the secondary schools of the Archdiocese of Philadelphia is $4,140 for the 2005-2006 school year. The tuition for an elementary school education varies by school, but averages about $2,000 and only covers about half of the actual cost per student; the rest is paid from local parish funds.
WHAT IS THE EDUCATIONAL IMPROVEMENT TAX CREDIT?
Local business owners now have the opportunity to help fund the increasing cost of a private school education via the Pennsylvania Educational Improvement Tax Credit (EITC) program. The EITC is a state funded program that is administered by the Department of Community and Economic Development (DCED) and was authorized�by an amendment to the Public School Code (Act 4 of 2001). Through this program, a company authorized to do business in Pennsylvania can apply to DCED for a tax credit equal to 75% of its one-year contribution to an approved scholarship organization, such as Saint Timothy School, up to a maximum of $200,000 per taxable year.. If the business agrees to provide the same amount of contribution for two consecutive tax years, that tax credit can be increased to 90% of the contribution made. The EITC enables companies to support local non-profit charities, at minimal cost. Instead of sending their tax dollars to Harrisburg, a business is giving its tax money to a scholarship organization.
BUSINESS ELIGIBILITY FOR THE EITC
Entities eligible to apply for Educational Improvement Tax Credits are businesses authorized to do business in the Commonwealth of Pennsylvania that are subject to the following Pennsylvania taxes: Corporate Net Income Tax, Capital Stock Franchise Tax, Bank and Trust Company Shares Tax, Title Insurance Companies Shares Tax, Insurance Premiums Tax, Mutual Thrift Institutions Tax.
APPLY IN JUST SIX EASY STEPS
1. An eligible business submits a simple one-page application for the tax credit by July 1st.
2. The business owner is given written notification from the Department of Community and Economic Development (DCED) that their business has been approved for tax credit.
3. The business makes a contribution to STEPS within 60 days.
4. STEPS sends a contribution verification letter to the donor business.
5. The business sends proof of contribution to DCED within 90 days.
6. The business receives a tax credit from the PA Department of Revenue.
THE BENEFITS OF DONATING
- Businesses receive 75 to 90 percent of their contribution back in the form of a tax credit on Pennsylvania business taxes.
- Businesses can send their tax dollars to S.T.E.P.S. instead of to the state government
- By participating in the EITC program, an organization accrues the public relations benefits that occur whenever a company supports a worthy cause in the area where it does business.
- A donation will make a real difference in a child�s life and prepare him or her for the workforce