EITC: Educational Improvement Tax Credit

What is EITC?

Enacted by the Pennsylvania Legislature in 2001, the Educational Improvement Tax Credit (EITC) provides a tax credit to businesses that pay Pennsylvania's corporate income tax for contributions to education improvement organizations.

The EITC program enables a Pennsylvania business to direct up to $750,000 of its Pennsylvania state tax dollars directly to Mastery Charter’s approved programs. Tax credits are given for 75 percent of a one-year gift and 90 percent of gifts given in two consecutive years.

Who is Eligible?

Businesses authorized to do business in Pennsylvania who are subject to one or more of the following taxes:

• Corporate net income tax
• Capital stock/franchise tax
• Bank and trust company shares tax
• Title insurance companies shares tax
• Insurance premiums
• Mutual thrift institutions tax
• Gross Receipts Tax
• Tax Under Insurance Company Law of 1921
• Personal Income Tax of S corporation shareholders or Partnership partners 

Who may make EITC gifts?

You might be surprised. Businesses ranging from neighborhood pharmacies, to mid-sized companies, to large corporations all are eligible. This includes the following type of businesses.

• C-Corporations (taxed at the corporate level)
• S-Corporations
• Partnerships
• Sole Proprietors
• Limited Liability Companies (LLC's)
• And new this year, subchapter S corporations and other businesses entities that pay their State business taxes under the personal income tax on PA business income can now fully participate.

How will the contribution be used by Mastery Charter Schools?

As an approved Educational Improvement Organization (EIO), Mastery has 3 high impact programs where your EITC dollars can make a substantial impact for our 8,000+ students:

• Internship Program
  • 18-week Training and Practicum Prepares Students to Enter the Professional World With Confidence and an Understanding of the Expectations for Success
  • More than 350 Mentor Sites Throughout Philadelphia

• Kindergarten to Second Grade Literacy Intensive Program
  • Increased Rigor, Time and Resources So Students Make Faster Gains
  • Focused Small Group and Large Group Instruction 160 Minutes Per Day

• Mastery Charter Schools-Community College of Philadelphia (CCP)
  • Full time Dual Enrollment Program for High Achieving Mastery Seniors
  • Students Complete Their Senior Year at CCP, Earn College Credit, and Prepare for the Rigors of College Study

Where do I apply?

The Department of Community and Economic Development has created an online application.  You can get more information at (717) 787-7120 or at www.newpa.com. Select “EITC Business Guidelines” for further information.

Pennsylvania businesses can begin applying for EITC credits through DCED's electronic single application system. 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.

Pass-through entities, such as S-Corporations, Partnerships, LLs, etc., can now apply the same day as C-Corporations. Applications must be submitted electronically using DCED’s Single Application for Assistance. Paper business applications will no longer be accepted.

The process is very simple:

1. Business completes the online application and submits it to the Department of Community and Economic Development (DCED).

2. Business receives a letter of approval from DCED.

3. Business submits monetary contribution within 60 days to Mastery Charter Schools Foundation

4. Mastery Charter Schools Foundation provides business with acknowledgement of contribution.

5. Business submits acknowledgement to DCED.

6. DCED communicates with PA Department of Revenue and applicable tax credit is applied to business tax account.

7. Credit is taken as a payment of taxes on businesses' annual tax return filing

When do I submit the application?

Business Application Timeline

• May 15 – Business applicants who have fulfilled their 2-year commitment and wish to reapply in FY 13/14 to renew their 2-year commitment.
• May 15 – Businesses who are in the middle of their 2-year commitment.
• July 1 – All other businesses

Now is the time to start thinking about joining the EITC program for the 2013-14 school year!  For more information on the EITC program, please contact Leslie Hall at 215-866-9000 x 1055 or email Leslie.Hall@masterycharter.org

Will Mastery Charter Schools help me apply?

Yes. We will work with you- even complete the application for you or come to your office to walk you through the process.  We want to make the process as simple as possible.

Who should I contact at Mastery Charter Schools to learn more or to discuss my interest in making an EITC gift?

Leslie Hall, Assistant Director of Development and Communications at 215-866-9000 x1055 or email Leslie.Hall@masterycharter.org

Where can I get additional information?

Click here for the link to the state web site for additional information.