Pennsylvania EITC/OSTC Program
Use your business or individual state taxes to give a gift of fearless learning
Benefits to AIM Academy
Your support through the EITC and OSTC programs helps AIM Academy continue to provide an outstanding educational experience for bright students who learn differently. Available to companies that are authorized to do business in Pennsylvania and individuals joining a Special Purpose Entity, these scholarship opportunities open the door for many families, allows students to fearlessly reach their academic potential, and enhances our ability to influence the educational experiences for children throughout the Philadelphia area and beyond. In addition, the scholarships enable us to create a diverse community and make possible necessary funding of other projects and school improvements.
What is EITC/OSTC?
Pennsylvania offers educational tax credits known as the Educational Improvement Tax Credit (EITC) or the Opportunity Scholarship Tax Credit (OSTC) that allow businesses/individuals to redirect tax dollars to AIM in support of student scholarships.
- EITC/OSTC offers the donor a PA tax credit of 90% for a 2-year commitment or a business may apply for a tax credit of 75% or 1 year.
- Educational Improvement Tax Credits (EITC) contributions provide financial aid to students who attend an eligible scholarship organization like AIM Academy.
- The Opportunity Scholarship Tax Credit (OSTC) program supports AIM students from low-income households who live in neighborhoods with low-achieving public schools (bottom 15% PSSA scores). The tax benefit to businesses is the same.
- Individuals may also join a Special Purpose Entity (SPE) such as the newly formed AIM Scholarship 1, LLC, Jewish Scholarship LLC, BLOCS, Central PA Scholarship Fund and others.
How can I participate as a business?
Businesses paying Pennsylvania taxes complete an online application each year (July 1, 2019) to the Department of Community and Economic Development or join an SPE. Awards are received on a first-come, first-served basis and within 60 days the contribution must be made to an approved educational organization. AIM provides a written acknowledgement that the business sends to DCED for tax credits to be applied.
A business owner can participate in both – as a business applying directly to PA (C-Corp, LLC, LLP, etc.) and as an individual through an SPE. The SPE allows the PA tax liability to flow through it for the purpose of participating in the EITC/OSTC program. The SPE makes the application to the Commonwealth on behalf of the members. Some SPEs have a minimum contribution – the business maximum is an $833,000 contribution ($750,000 tax credit).
If your business (C-Corp, S-Corp, LLC or Partnership) is subject to one or more of the following Pennsylvania taxes, you are eligible.
- Personal Income Tax of S corporation shareholders or Partnership partners
- Corporate Net Income Tax
- Capital Stock/Foreign Franchise Tax
- Bank Shares Tax
- Title Insurance & Trust Companies Shares Tax
- Insurance Premium Tax
- Mutual Thrift Tax
- Malt Beverage Tax
- Retaliatory Fees under section 212 of the Insurance Company Law of 1921
It’s easy to apply!
Here is how it works:
- Tax credits are awarded on a first-come first-served basis through completing a Single Application for Assistance each year.
- Applications for the second year of a two-year commitment are due May 15, 2020.
- Renewal applications for donors completing a two-year commitment are accepted starting May 15, 2020.
- New business applications are submitted on July 1, 2020.
- Tax credits are given for 75% of your business contribution, up to a maximum of $750,000 per year.
- Businesses making a two-year commitment receive a tax credit equal to 90% of the contribution.
- Please consult your tax advisor to maximize your potential tax savings.
In a rush?
Go to https://www.esa.dced.state.pa.us/Login.aspx
and click “apply” at the top of the page.
How can I participate as an individual?
If you pay Pennsylvania income taxes you can donate them to AIM Academy! Individuals can redirect up to 100% of their personal state tax bill to AIM through the same EITC/OSTC programs by joining a Special Purpose Entity (SPE). A two-year commitment will get you a 90% credit on state taxes owed. And the 10% not included in the tax credit may be claimed as a charitable donation on your federal tax return.
To become a member of an SPE, you must:
- Give a 2-year commitment with a minimum contribution indicated by the SPE.
- Individuals must also meet the SEC Defined Accredited Investor Requirement, Rule 501 of Regulation D: Individual income of $200,000 OR Husband/Wife combined income of $300,000 in each of the last two years; or $1,000,000 net investable assets excluding primary residence.
- Sign an operating agreement with your first-year contribution.
- Please consult your tax professional to choose the right amount.
Please contact Joy Antonoplos, Associate Director of Institutional Advancement at firstname.lastname@example.org or 215-948-9335 for assistance.