EITC Tax Credits
“The EITC program is an opportunity for our state tax dollars to be reallocated to the SPS scholarship fund. More scholarships means more kids can benefit from an amazing St. Peter’s education! We love that it has a positive and truly meaningful impact on our entire school community.”
– Erica Daza & Alejandro Fernandez P’28 ’30
Pennsylvania Tax Credit Program
What is EITC?
The Educational Improvement Tax Credit (EITC) program provides individuals and companies with a 75% tax credit for donations to a non-profit scholarship or educational improvement organization, such as a school. The tax credit increases to 90% if a commitment to making the same donations for two consecutive years is made. EITC provides low-income Pennsylvania children and families with much needed tuition assistance.
What is OSTC?
The Opportunity Scholarship Tax Credit (OSTC) program provides tuition assistance to children who live within the attendance boundaries of Pennsylvania’s worst performing 15% of schools. Just like the EITC program, the OSTC program awards Pennsylvania businesses a tax credit of up to 90% if the individual or company commits to making the same donations for two consecutive years.
The Philanthropic Impact
Through Pennsylvania’s EITC/OSTC programs, qualified businesses and individuals can redirect their state tax liability to tuition assistance. This makes large gifts very inexpensive to make. For example, a $10,000 gift will cost a donor just $1,000 to make, and if you itemize, you can also claim that $1,000 as a charitable gift.
Our Administrative Partners at BLOCS
SPS offers tuition assistance annually to approximately 25% of families. Many of these families are in the boundaries of an underperforming school district, which gives us flexibility in accepting EITC or OSTC. We, along with many local independent schools, partner closely with Business Leadership Organized for Catholic Schools (BLOCS) to manage and receive our EITC/OSTC funds. BLOCS is an experienced, long-standing participant in the program and we are grateful for their assistance.
Eligibility and Out-of-Pocket Costs
EITC and OSTC are open to any business that pays PA taxes, and individuals making over a certain income threshold (approximately $165,000). There is generally a minimum capital commitment upfront of $5,000 per member, however the overall out of pocket cost starts at around $315, after the tax credits and reductions are realized. See sample tax calculations (pulled from the BLOCS website) below:
Sample Tax Calculations
Sample Calculation for LLC, Partnership or S-Corporation (2 year commitment):
Cash to Charity ($10,000)
PA Tax CreditReduction (90% of contribution) ($9,000)
Net Federal Tax Reduction for contribution (37% tax rate) ($370)
Out of Pocket ($630)
“In just thirty minutes, I was able to direct state income tax payments through the Pennsylvania EITC program to support St. Peter’s School. Knowing that these funds are going to a place where we have a vested interest and still getting all of the tax benefits is a win/win.”
– Jake Hollinger P ’27 ’30, SPS Board Member
Questions?
Please contact Tiffani Harris, Director of Development, at 215-925-3963 x408 or tharris@st-peters-school.org to be connected with our partners at BLOCS, who will answer questions and help guide you through the application process.
We would also be happy to connect you with a current SPS parent who participates in the EITC/OSTC program through BLOCS.
Information provided by representatives of SPS or in SPS publications is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor.