EITC (Educational Improvement Tax Credit)

What is EITC?

The award of tax credits to eligible businesses contributing to an Educational Improvement Organization.

What does your business contribution to the Lancaster-Lebanon Education Foundation (LLEF) through the EITC program do for learners in the community?

  • Lancaster-Lebanon Virtual Solutions –  Lancaster-Lebanon Virtual Solutions, an online learning opportunity for secondary students, in an innovative educational program designed to enhance the continuum of educational options available to students in the Lancaster and Lebanon Areas.
  • SmartHelp LIVE! Mathematics Tutoring – Provides skills-based, differentiated, interactive instruction to help meet the varying needs of our students in two IU 13 Community Schools.
  • One-to-One Laptop Initiative to Advance Academic Achievement – Providing lap top computers for each student in the Lancaster-Lebanon IU 13’s five Community Schools as a readily available tool through which to provide innovative instructional strategies and resources across curriculum areas both in the classroom and for independent study.
  • Online Enrichment Course Program – Provides enrichment opportunities for gifted and academically advanced students through study in advanced or specialized subjects not already available in local high schools.
  • FOSS Science Program Expansion – Provide this innovative inquiry-based, hands-on approach to science instruction for additional classes at the elementary and middle school level.
  • “Power Up” Alternative Education Program – This program will prepare our middle and high school students for life after graduation by preparing them with the skills, knowledge, and expertise students should master to success in work and life.
  • Project SAIL – A summer enrichment program to provide advanced academic enrichment opportunities for middle and high school students in Lancaster and Lebanon counties focusing on high-level, innovative, hands-on student learning with experts in the field.

For more details on each of these approved projects for EITC funds, click here.

Who is eligible to make EITC gifts:

  • C-Corporations (taxed at the corporate level)
  • S-Corporations
  • Partnerships
  • Sole Proprietors
  • Limited Liability Companies (LLC’s) and Partnerships (LLP’s)

What business taxes can you claim credits against:

  • 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

How much can be applied?

  • A business will be approved for a tax credit equal to 75% of its contribution up to a maximum of $750,000.00 per taxable year.
  • The tax credit increases to 90% of the contributions made, if business agrees to provide same amount for up to two consecutive tax years.

How can I apply?

A one page application form can be obtained from the PA Department of Community and Economic Development (DCED) at 717.787.7120 or on their website www.newpa.com (Select “EITC Business Guidelines”). Applications are accepted on a first-come-first-serve basis. See application deadlines below.

What all is involved in the process?

  1. Business completes the one page application and submits it to the DCED. Tax credit applications will be processed on a first-come-first-served basis.
  2. Business then receives a letter of approval from the DCED.
  3. Upon receipt of written notification from the DCED that the business has been approved for tax credits, the business must make its contribution(s) to the Lancaster-Lebanon Education Foundation within 60 days of the date of the letter.
  4. The Lancaster-Lebanon Education Foundation will provide business with written acknowledgement of contribution.
  5. Business submits acknowledgement of contribution to the DCED within 90 days of the date of the approval letter.
  6. Upon receipt of proof of a contribution, the DCED will communicate with the Department of Revenue to apply the EITC against the appropriate taxes identified by the business.
  7. Credit is taken as a payment of taxes on businesses’ annual tax return filing.

Application deadlines:

  • Renewal for business applicants who have fulfilled their 2-year commitment: May 15
  • Businesses who are in the middle of their 2-year commitment : May 15
  • All other businesses including Pre-K applications: July 1

How can we help?

We would be happy to help guide you through the process of applying for EITC credits and answer any other questions you might have. Please contact Shannan Guthrie at 717.606.1702.

For more information check out the Department of Community and Economic Development website.

Source: PA Department of Community and Economic Development, EITC Program – Guidelines for Business Firms for Contributions to Scholarship, Edu. Improvement, Pre-K Orgs. Harrisburg, PA, 2012.