The Opportunity Scholarship Tax Credit (OSTC) and Educational Improvement Tax Credit (EITC) are programs of the Pennsylvania Department of Community and Economic Development (DCED). The programs make it possible for companies to decide where their tax dollars are going and to support a local nonprofit charity of their choice.
Your business can make a tax-deductible contribution to an approved scholarship organization, such as Buxmont Academy, and receive a tax credit that can be applied against your company’s tax liability for the tax year in which the contribution is made.
And this is not just a deduction. Every dollar you allocate to your OSTC or EITC not only decreases the taxes you pay, it also directly benefits students who need help with their education.
We suggest applying to OSTC, as more more funds are currently available through that program.
How much of a tax credit will I get for my business?
Your businesses can obtain a tax credit equal to 75% of its contribution, with a maximum credit of $750,000 per taxable year. If your business agrees to assign the same amount for two consecutive tax years, the maximum credit allowed increases to 90% of the contribution.
Is my donation still considered a charitable deduction?
Yes. Buxmont Academy is a registered 501(c)(3) organization. Existing charitable deduction regulations still apply, increasing the value of your tax credit even more.
Which businesses qualify to receive the credit?
All businesses authorized to do business in Pennsylvania except sole proprietorships.
Which scholarship organizations qualify to earn the credit for my business?
Scholarship organizations eligible to receive OSTC and EITC contributions must be approved by the Department of Community and Economic Development (DCED) and registered as 501(c)(3) organizations.
Can my business contribute to more than one organization?
Absolutely. Businesses may donate to as many approved organizations as they choose. A list of eligible organizations are on the OSTC and EITC webpages.
What is the process for my business to receive the tax credit?
- Your business applies to the DCED tax credit program and chooses to enroll for either one or two years.
2017 Enrollment timeline:
- 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 3 – First-time applicants and businesses submitting additional applications on top of their previous two-year commitments.
- The DCED verifies that there is money available for your credit and then approves your tax credit, sending your business a letter of approval. (Credits are awarded on a first-come, first-served basis.)
- Within 60 days of approval, your business makes your charitable contribution to the approved organization (Buxmont Academy).
- Buxmont Academy sends you a receipt that serves as proof of your contribution.
- Your business sends the receipt from Buxmont Academy to the DCED within 90 days of the date of the approval letter from the DCED.
- The DCED notifies the PA Department of Revenue to apply the credit to your business’s tax account.
For assistance obtaining the OSTC or EITC tax credit for your business, contact Buxmont Academy’s Laura Mirsky, at 267-718-7374.