Educational Improvement Tax Credit (EITC)
What is the Educational Improvement Tax Credit (EITC) program?
Offered by the Pennsylvania Department of Community and Economic Development (DCED), this program allows businesses to receive significant tax credits when they contribute to qualified educational improvement organizations such as The M.S. Hershey Foundation. Funding from the EITC program allows the Foundation to bring increased educational opportunities to thousands of children every year, thereby continuing its mission to provide educational and cultural enrichment to the residents and visitors of Hershey.
This program only funds “innovative educational programs” that are pre-approved by the DCED. It does not fund general operating expenses.
The EITC program amends the Pennsylvania Public School Code to authorize tax credits for businesses that make contributions to educational improvement organizations (EIO).
What is an educational improvement organization (EIO)?
EIOs are non-profit organizations that have been approved by DCED for participation in the EITC program. To become an EIO, the non-profit must apply to the DCED to show how their programs improve the educational opportunities for children. The M.S. Hershey Foundation has been designated an eligible EIO.
What businesses are eligible?
Businesses authorized to do business in Pennsylvania who are subject to one or more of the following taxes:
- Personal Income Tax
- Capital Stock/Foreign Franchise Tax
- Corporate Net Income Tax
- Bank Shares Tax
- Title Insurance & Trust Company Shares Tax
- Insurance Premium Tax (excluding unauthorized, domestic/foreign marine)
- Mutual Thrift Tax
- Malt Beverage Tax
- Surplus Lines Tax
Why should your business give?
Tax credits equal to 75% of your contribution, up to a maximum of $750,000 per taxable year. Credits can be increased to 90% of the contribution, if your business agrees to provide the same amount for two consecutive tax years. Tax credits may be applied against the tax liability of a business for the tax year in which the contribution was made. Plus, you are helping support The M.S. Hershey Foundation’s educational programs at Hershey Gardens, The Hershey Story Museum, Hershey Theatre and Hershey Community Archives.
When does the tax credit program begin?
Tax credits to eligible businesses contributing to an Educational Improvement Organization:
May 15 – Business applicants who have fulfilled their 2-year commitment and wish to reapply to renew their 2-year commitment.
May 15 – Businesses who are in the middle of their 2-year commitment.
July 1 – All other businesses including initial applicants and those applicants wishing to submit an additional application on top of their previously submitted 2-year commitment.
How do businesses apply for the tax credit?
The process is simple. Pennsylvania businesses can begin applying for EITC credits through the Enterprise eGrants System. DCED will no longer require applicants to mail the signed signature page.
The business application guide explains the process of applying. Tax credit applications will be processed on a first-come, first-served basis by day submitted. All applications received on a specific day will be processed on a random basis before moving on to the next day’s applications. Applications will be approved until the amount of available tax credits is exhausted.
