PA – EITC

PA Educational Improvement Tax Credit and Opportunity Scholarship Tax Credit combine targeted charitable giving with tax credits.

What is it? A PA credit is allowed for pre-approved expenditures for contributions made to a Scholarship Organization, an Educational Improvement Organization and/or a Pre-Kindergarten Scholarship Organization. The state maintains a list of organizations that qualify to receive contributions.

Who can use it? Virtually all entity types. As a result, this credit can be used by shareholders, partners and sole proprietors.

Why do it? Up to 100% of the contributions can be used as a PA tax credit against corporate taxes and individual income taxes. In addition, this in no way nullifies the federal deduction.

How much could it save in PA taxes? There are no limitations other than the amount must be pre-approved. It is important to note that the credit is not refundable and it can only offset tax liability for the year of the credit.

To learn more contact Francis E. Molinari, CPA at 610-871-6700 or directly at fmolinari@molinarioswald.com

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