WHAT IS EITC? EITC (Educational Improvement Tax Credit) was enacted by the Pennsylvania State Legislature in 2003. It provides a tax credit to corporations who make donations to state-approved educational organizations that open doors of opportunity. Uptown! Entertainment Alliance is an approved EITC organization. Eligible businesses can receive a tax credit equal to 75% of their contribution to Uptown! Entertainment Alliance. This credit is increased to 90% if the business commits to give the same amount for two consecutive years.
Your Business! If your company is subject to the following taxes…
- 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
…you are eligible to give!
Additional Information: The maximum allowable credit per year is $300,000. This amount may be split across multiple scholarship organizations. The credit must be used in the year of application (no carry-forward or carry-back) and cannot exceed the tax liability for that year. In 2010, there was over $52 million in EITC funding available for scholarship organizations. Tax credit is available to pass-through entities such as partnerships, limited liability companies, and S corporations, including accounting and law firms. The act also provides that a pass-through entity that does not use all approved tax credits may elect, in writing, to transfer all or a portion of the credit to the entity’s owners in proportion to their ownership percentages.
It’s easy as 1 – 2 – 3
1. Submit an EITC application to determine your tax credit / contribution amount. Form available at www.newpa.com/EITC may be sent to the PA Department of Community and Economic Development (DCED). Applications for the upcoming program fiscal year (July 1 – June 30) will be accepted beginning July 1 and are processed on a first come, first served basis. Applications will be processed until the amount of available tax credits is exhausted.
2. Make your contribution upon approval. DCED will notify you when you have been approved for tax credits. Then, you can make a contribution to Uptown! Entertainment Alliance in the amount of your tax credit (within 60 days of the date of the letter from DCED). Uptown! will send you an acknowledgement letter, which you must then send to DCED as proof of the donation (within 90 days of the date of the letter).
3. PA Dept. of Revenue applies your tax credits. After receiving proof of the contribution, the DCED notifies the Dept. of Revenue, which applies the tax credits against the appropriate taxes identified by the business in its application.