Who likes tax credits?

November 26, 2024 | Sharon Sedlar

During this month of November, we’ve been talking a lot about PA K-12 Scholarship programs – what they are, why we need them, how they work, and how they’re beneficial for students across Pennsylvania. We’ve covered these programs from a policy, parent, scholarship organization, and fiscal perspective. But one aspect we haven’t explored is the donor side.

*Check with your accountant on the below, as I am not a tax expert.*

The EITC (Educational Improvement Tax Credit), OSTC (Opportunity Scholarship Tax Credit), and EDS (Economically Disadvantaged School) programs all offer individual and business donors with a tax credit that applies to annual taxes.

Plainly put, if you (individual or business) donate to these programs through December 31st, you could be eligible for a tax credit on 2024 taxes; instead of taxes going to state government, they will go to a Scholarship Granting Organization for distribution to an EITC/OSTC/EDS participating school, and then on to a student in need.

A reminder on the EITC/OSTC programs (courtesy of Commonwealth Foundation Fact sheets, which can be found on our website):

Average household income is $41,463 for scholarship recipients across the state with an average scholarship of $2,780 awarded to each student
According to STS (Simple Tuition Systems) for their scholarship recipients, one in three students identify as a person of color

EITC/OSTC program support (90% tax credit)

According to Jim O’Donnell, of the DCED (Department of Community and Economic Development, the government agency that oversees the programs), the fund can still take in $50 million donation dollars in these upcoming remaining weeks in this year for the EITC, OSTC and Pre-K programs. More information can be found at https://dced.pa.gov/programs/educational-improvement-tax-credit-program-eitc/ and https://dced.pa.gov/programs/opportunity-scholarship-tax-credit-program-ostc/, and the customer service center phone number is 1-866-466-3972.

EDS and BLOCS – (99% tax credit!)

An economically disadvantaged school is defined as one in which at least 51% of the children attending the school qualify for an EITC or OSTC scholarship. EDS contributions receive an 85% tax credit for 1 year commitments, and a 99% tax credit for 2 year commitments.

While the DCED can certainly assist with EDS-specific donations, it may be of benefit to go directly to BLOCS (Business Leaders Organized for Catholic Schools; of important note is that BLOCS processes funds for many other, non-Catholic private schools).

Of course, our website also lists important information about these programs.