EDUCATIONAL IMPROVEMENT TAX CREDIT PROGRAM

A UNIQUE OPPORTUNITY FOR YOUR COMPANY AND

COMMUNITY PARTNERSHIP SCHOOL

What is EITC?

• The Educational Improvement Tax Credit (“EITC”) was enacted by the Pennsylvania State Legislature in 2003. It provides a tax credit to corporations that make donations to state-approved scholarship organizations.

• Community Partnership School is an approved scholarship organization! The complete list of eligible scholarship organizations can be found at: www.newPA.com/EITC

• Eligible businesses can receive a tax credit equal to 75% of their contribution to CPS. This credit is increased to 90% if the business commits to give the same amount for two consecutive years.

• Eligible businesses can receive a tax credit equal to 100% of their contribution to CPS if it is applied to pre-K scholarships.

What businesses are eligible for the tax credit?

Companies that are authorized do business in the Commonwealth in Pennsylvania and are subject to the following taxes:

Corporate Net Income TaxCapital Stock Franchise TaxBank and Trust Company Shares TaxTitle Insurance Companies Shares TaxInsurance Premiums TaxMutual Thrift Institutions Tax

More Details about EITC

• The maximum allowable credit per year is $300,000. That amount can 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.

• 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

In the last two years, CPS has received more than $325,000 in EITC funding from corporations .

This amount can:Provided full tuition funding for over 20 CPS

studentsCover CPS’s rent and plant expenses for almost two

years

How does EITC impact CPS?

How can I make a contribution to CPS through EITC?

Step One: You or your accountant submits a completed EITC application form to the PA Department of Community and Economic Development (DCED). Applications available at www.newpa.com/EITCApplications for tax credits for the upcoming

program fiscal year (July 1 – June 30th) will be accepted beginning July 1st and are processed on the basis of lottery. Applications will be processed until the amount of available tax credits is exhausted.

Step Two: DCED will notify you when you have been approved for tax credits. Then, you can make a contribution to CPS in the amount of your tax credit (within 60 days of the date of the letter from DCED). CPS will send you an acknowledgement letter, which you must then send to DCED to provide proof of the donation (within 90 days of the date of the letter).

Step Three: 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.

That’s it!

EITC Examples

• Company applies for EITC and is approved for a $10,000 tax credit. Company makes a $10,000 contribution to CPS as part of a one-year commitment. Company’s state tax burden is reduced by 75% of the contribution ($7500).

• Company applies for EITC and is approved for a $25,000 tax credit. Company makes a $25,000 contribution to CPS as part of a two-year commitment. Company’s state tax burden is reduced by 90% of the contribution ( $22,500).

Visit the PA DCED website: www.newpa.com/EITC

Contact the CPS Development Office:Carol Hill, Director of Development

c.hill@cpsphilly.org

Angela McCole, Associate Director of Developmenta.mccole@cpsphilly.org

215-235-0461