EITC spells education success
Guest Columnist
By A. B. HILL
Maria will be a seventh-grader at the Cathedral School in Harrisburg this fall. She spells success EITC.
A scholarship made possible by a business’s generous contribution through Pennsylvania’s Educational Improvement Tax Credit (EITC) program allows her family to choose Catholic education for Maria.
The EITC, established in 2001, provides businesses with a tax credit for the donations they make to scholarship organizations, which then provide scholarships to children. In essence, it gives parents like Maria’s mom and dad the economic means to choose the learning environment they believe best meets the needs of their children, regardless of their family income.
During the 2007-08 school year, 44,000 children received EITC scholarships. Since the program’s inception in 2001, more than 3,600 Pennsylvania companies have participated in the EITC program donating almost $350 million to participating organizations. The EITC program currently provides $75 million for scholarships for pre-kindergarten through 12th grade.
The EITC program recently received some modifications that will make a big difference in how companies can take advantage of the tax credits. Pre-K contributions went from a maximum of $100,000 to $150,000 and K-12 from $200,000 to $300,000. In addition, subchapter-S corporations, partnerships, limited liability partnerships and limited liability companies become eligible to participate fully in EITC.
Tax credits are not deductions. A tax credit is an actual reduction in the amount of tax a business will pay. In essence, a business can pay its taxes directly to the Commonwealth, or by making a donation, substantially reduce its tax liability while helping families and helping the community.
To receive its tax credit, the business simply submits a one-page application to the Department of Community and Economic Development (DCED). Tax credits are awarded on a first-come, first-served basis.
Families may apply for scholarships, which are awarded according to the scholarship organization’s criteria. (In the Archdicoese of Philadelphia, the scholarship organization is BLOCS; visit blocs.org.)
Minimally, scholarships must go to students with annual household incomes of $50,000 or less with an additional $10,000 allowance for the student and each other dependent living in the same household. To learn more about EITC, call 877-REACH 24.
A. B. Hill is Communications Director of the Pennsylvania Catholic Conference — the public affairs arm of the Catholic bishops of Pennsylvania.