EITC Explained

Each year, the Commonwealth of Pennsylvania awards over $175 Million to qualifying educational programs through the Educational Improvement Tax Credit (EITC) Program.

Your business can support PBT’s qualifying programs that directly benefit children by providing opportunities to participate in experiential arts education in the classroom through PBT’s In-Step and Creative Movement Residency programs.

What is the Educational Improvement Tax Credit?

The Educational Improvement Tax Credit (EITC) provides companies with a 75% tax credit for donations to a non-profit scholarship or educational improvement organization. The tax credit increases to 90% if the company commits to making the same donations for two consecutive years. A business paying taxes in Pennsylvania can receive up to $750,000 in tax credits annually. More importantly, the EITC provides children and families with a choice in their education and a chance in life. For complete guidelines, visit the PA Department of Community & Economic Development.

What types of taxes can be offset by this credit?

A business must be subject to one of the following seven Pennsylvania business taxes to participate:

  1. Corporate Net Income Tax
  2. Capital Stock Franchise Tax
  3. Personal Income Tax of S Corporation Shareholders, or partners in a limited or general partnership
  4. Bank and Trust Company Shares Tax
  5. Insurance Premiums Tax
  6. Mutual Thrift Institutions Tax
  7. Title Insurance Companies Shares Tax

Can I see an example of how the credit works?

Sample Calculation for LLC, Partnership or S-Corporation (2 year commitment):

Cash to Charity $10,000
PA Tax Credit Reduction (90% of contribution) (9,000)
Net Federal Tax Reduction for contribution (39.6% tax rate) (396)*
Out of Pocket $604**

*($10,000-9,000*39.6%) Additional savings if taxpayer is in AMT
**Additional savings if taxpayer pays local income tax

This business owner redirected $9,000 from Harrisburg to a local scholarship organization.

For questions, please contact Erin Starzynski, Corporate Relations Manager, at 412-454-9138 or estarzynski@pittsburghballet.org.