Educational Improvement Tax Credit Program

Earned Income Tax Credit (PA DCED)

Sincere thanks to the following EITC donors over the years 2017-2018:

Avalon Insurance
BB&T
Capital Blue Cross
Embassy Bank
Firstrust
Giant
QNB Bank
UGI Utilities
Univest Bank and Trust Co.
Weis

Over the past three years, more than $240,000 has been raised for Allentown School District Foundation (ASDF) to support enriched learning opportunities for Allentown’s students.
There is much more to do, and the increased support of businesses is a key funding source for our work.

FAQ (Frequently Asked Questions)

Q. What is the Educational Improvement Tax Credit (EITC) program?
A. The Educational Improvement Tax Credit (EITC) program authorizes tax credits (not deductions) for businesses that make contributions to Educational Improvement Organizations, such as the Allentown School District Foundation. The program is administered by the Pennsylvania Department of Community and Economic Development (DCED). The EITC program enables companies to support nonprofit school foundations. Companies can reallocate tax dollars to support ASDF, considered a donation to a local educational improvement (EIO) organization.

Q. How does the EITC program work?
A. If you are not an organization that has already applied for the EITC tax credit opportunity, you can apply by going to www.newpa.com. An approved business is eligible for tax credits equal to 75 percent of its contribution up to a maximum of $750,000 per year or 90 percent of the contribution, if the business agrees to provide the same amount for two consecutive tax years.

The tax credit is a 75% -- 90% credit against taxes owed. To gain the maximum tax credit, a company must provide a written two-year commitment of equal funding to an education foundation. Companies can effectively get a dollar-for-dollar credit for an EITC donation because if a company has not maximized their percentage of charitable donations, they can also deduct their contribution on their federal tax return. Eligible companies may take up to $300,000 in tax credits per year.

Any amount, large or small, helps the ASD Foundation add more educational opportunities for more success for its students.

Q. What businesses are eligible?
A. Any business that is authorized to do business in Pennsylvania and is subject to paying one or more of the following taxes:
  • Corporate net income tax
  • Capital stock/foreign franchise tax
  • Bank and trust company shares tax
  • Title insurance & trust company shares tax
  • Insurance premium tax (some exclusions apply)
  • Malt beverage tax
  • Mutual thrift institution tax
  • Personal income tax of S corporation shareholders or partnership partners

Q. Why should businesses participate?
A. The EITC is a wonderful way for businesses to significantly reduce their Pennsylvania tax liability while supporting organizations such as the Allentown School District Foundation. Your company shares in the satisfaction of improving educational opportunities for Allentown’s children. Your support of this worthy cause will be promoted by the ASD Foundation to the public, staff and faculty, board members, community leaders, parents and certainly your connections as well.

Q. How does my business participate?
A. The EITC program runs every year from July 1 – June 30. The application form and information is available on the Department of Community and Economic Development’s (DCED) website which can be found by clicking here.
A business, already enrolled and has fulfilled its one- or two-year commitment completes a new online application by submitting it to the PA DCED website by May 15 of each year (New applicants: later, by July 1 of each year). The process must be completed online. Complete instructions are available. Contact DCED at 717-787-7120 or RA-eitc@pa.gov if you have more questions. An explaniation of the process: 
  • Business receives letter of approval from DCED.
  • Business submits monetary contribution within 60 days for Allentown School District Foundation which is a qualified EIO. Sending your donation sooner than later provides better assurance your tax credits will be applied.
  • Allentown School District Education Foundation provides business with acknowledgment of contribution.
  • Business submits acknowledgment to DCED, within 90 days of your acceptance in order to ensure proper credit. Tax credits are used up quickly so your company’s acceptance is not a guarantee.
  • DCED communicates with PA Department of Revenue and applicable tax credit is applied to business tax account.
  • Credit is taken as a payment of taxes on businesses’ annual state tax return filing.
Q. Who is going to benefit?
A. Your donation will directly benefit students K-12 in several enrichment programs related to the Performing and Visual Arts, STEM (Science, Technology, Engineering and Mathematics), History and Geography, Physical Fitness, and more.

Q. Any other terms?
A. An approved company must provide proof to DCED within 90 days of the notification letter that the contribution was made within 60 days of the notification letter. Tax credits not used in the tax year the contribution was made may not be carried forward or carried back and are not refundable or transferable.

Q. What is the next step?
A. Please contact Susan L. Williams, Executive Director of the Allentown School District Foundation, at 484-765-4093 or williamssu@allentownsd.org