May 15th-June 30th: Current participating businesses
July 1st: New businesses or current businesses who wish to submit an additional application
Pennsylvania’s Educational Improvement Tax Credit (EITC) Program enables Pennsylvania businesses to direct their state taxes to JEVS Human Services to be used to support young people to explore careers in the building trades and STEM.
What is EITC?
The Educational Improvement Tax Credit (EITC) program authorizes tax credits for businesses that make contributions to educational improvement. The EITC is administered by Pennsylvania’s Department of Community and Economic Development (DCED).
This program is unique to Pennsylvania in that it allows businesses to make charitable contributions based on the amount of Pennsylvania state taxes they pay. A business may receive a tax credit equal to 75% of its contribution to an eligible Educational Improvement Organization, such as JEVS Human Services, up to a maximum of $750,000 per taxable year. Tax credits may be increased to 90% of the contribution made if the business agrees to provide the same amount of contribution to an organization for two consecutive years.
Why should a business participate?
The EITC program was designed to encourage Pennsylvania organizations and businesses to partner in support of local communities. Contributions made under the EITC program help community organizations continue the valuable work they do.
In addition to generating goodwill, participating Pennsylvania businesses can reduce their tax liability by supporting organizations like JEVS. Specifically, businesses are able to reduce their actual tax bill – dollar for dollar – once a tax liability has been established.
For example, a $100,000 donation generates a $75,000 tax credit. This same donation can also be claimed as a donation on federal tax returns. A net donation of $100,000 each of two consecutive years is eligible for a 90% percent tax credit or, $90,000 for each of the two years.
What are Educational Improvement Organizations?
JEVS Human Services has been designated as an eligible Educational Improvement Organization by the DCED. In order to qualify for this designation, JEVS has been recognized as providing innovative educational programs. Specifically our Building Trade and STEM Career Exploration program is eligible for support through EITC. Read more about JEVS’ Career Exploration Program in The Notebook.
Who is 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 surplus lines, unauthorized, domestic/foreign marine)
- Mutual Thrift Tax
- Malt Beverage Tax
- Retaliatory Fees under section 212 of the Insurance Company Law of 1921
When does the tax credit program begin?
The EITC program year is July 1 – June 30. Businesses currently participating in the program can apply beginning on May 15, 2020. New applications for FY 20-21 will be accepted by DCED beginning on July 1, 2020. New interested parties are encouraged to apply ON July 1st. Please note that the number of tax credits is limited and available on a first come, first served basis.
How do I apply?
A one-page application form is available through DCED at https://www.esa.dced.state.pa.us/Login.aspx . The website provides further information on the program and a step by step guide to filling out the application. You can also call (717)787-7120 for a copy of the application. Click HERE for step-by-step instructions on how to apply.
- Step One: Businesses submit a one-page application to the DCED indicating what amount they plan to contribute.
- Step Two: The DCED will notify businesses that have been approved.
- Step Three: After receiving approval, businesses have 60 days to make the contribution to an approved Educational Improvement Organization.
- Step Four: Businesses must provide the DCED with a copy of the confirmation of contribution from the Educational Improvement Organization (JEVS Human Services will provide a contribution receipt).
- Step Five: The DCED will communicate with the PA Dept. of Revenue and applicable tax credit is applied to the business tax account.
- Step Six: Credit is taken as a payment of taxes on annual business tax return filing.
Click HERE for more information from DCED.