Monday, May 18, 2020
I am writing you today to inform you about the Educational Improvement Tax Credit Program (EITC) and how potential tax dollars turn into scholarships.
What is the Pennsylvania EITC Program?
On Friday, May 15, The Educational Improvement Tax Credit program allowed business donors and accredited individual donors to redirect their annual business and individual income tax liabilities to local schools and charities that help children from ages 3 to 18. Since 2001, Pennsylvania’s EITC program has allowed businesses and individuals to lower their tax bills by donating to private schools, scholarship organizations, pre-K programs like the Illumination Early Learning Center at the Friedman JCC, and other educational enrichment initiatives.
The bulk of the tax credits — $110 million per year — are reserved for donors that give to scholarship organizations, which provide financial aid to children attending K-12 private schools.
Donors can also get tax credits for giving to Educational Improvement Organizations — non-profit museums, civic clubs, and community centers that provide innovative programs in public schools. The program also sets aside a small sliver of tax credits for donors that give to pre-k scholarship funds.
What tax benefit does a donor receive?
The donor receives a 90% Pennsylvania state tax credit offer in return for a two-year commitment to donate to a specific list of local registered charities. The donor also receives a federal tax deduction with a benefit of 0% to 28% depending on the donor’s tax situation. For example, a taxpayer paying AMT federal tax (the alternative minimum tax) can receive a 28% Federal benefit creating a situation where the donation lowers the donor’s total taxes by 118%. The donor is effectively redirecting their state taxes to local charities of their choice. The donation tax credit is limited to the donor’s state tax incurred annually.
What charities participate in the program?
Pennsylvania DCED publishes a list of charities that have registered to receive Pennsylvania tax credits. The Friedman JCC is registered and listed as a charity.
How can you get involved?
The first step is to request a PA EITC tax credit from the program. Volunteers are available at each participating charity to help with this simple, no obligation request. The PA EITC program receives more requests than it can honor annually so there may be a delay in receiving a tax credit award.
Once you receive a tax credit award you can make your donation to the Friedman Jewish Community Center. Thank you
Chief Executive Officer