PA Opportunity Scholarship Tax Credit & Educational Improvement Tax Credit 2014

Opening dates for applying to the Opportunity Scholarship Tax Credit or the Educational Improvement Tax Credit program are approaching. The educational improvement tax credit may be awarded to operating businesses that make contributions to Scholarship Organizations and/or Educational Improvement Organizations and/or Pre-K Scholarship Organizations. The opportunity scholarship tax credit program provides tax credits to eligible businesses contributing to an Opportunity Scholarship Organization. Business contributions are then used by Opportunity Scholarship Organizations to provide tuition assistance in the form of scholarships to eligible students.

Tax credits may be used against the Pennsylvania tax liability of a business for the tax year in which the contribution was made. A pass-through entity, an S corporation or a partnership, that has approved credits that it cannot use, may transfer all or a portion of them to its shareholders, partners or members who can claim the credit on their personal tax return.

Recent changes have been made within these programs.

Maximum tax credit per entity increases. For this upcoming cycle, the maximum tax credit per entity is $750,000. If you are eligible and entering a new two year cycle, you can request a maximum amount of $750,000. If you are in year two of a two year cycle, you are required to commit to the amount that you requested last year.

Different opening dates apply. The opening dates for applying are as follows:

  • If you are entering year two of two or are a returning donor to either program, you can renew your application beginning May 15, 2014
  • If you are a new donor or a donor that did not participate last year, you can apply as early as July 1, 2014

Businesses that wish to participate in these programs can no longer apply with a paper application. You have two options for applying:

  • You may begin the application process now by registering and creating a username and password and applying at https://www.esa.dced.state.pa.us/Login.aspx
  • If you would like Isdaner & Company to register and apply for you, please contact us and we will send you the paper application. This application would need to be returned to us BEFORE your corresponding opening date.

After your application is submitted, you must submit the signature page to the Pennsylvania Department of Community & Economic Development (DCED) via US mail. This page will either be printed by you after you have applied online or sent to you from us after we have applied on your behalf. After your single application is submitted, the application will be reviewed by the DCED. When you are approved, you will receive a notification regarding their tax credits by US mail. You will then have 60 days to make a contribution to your selected organization. The organization will then send you a donation receipt that you will need to submit to the DCED within 30 days.

REMEMBER: These tax credits are available on a first come, first serve basis. The amount allocated to these programs is limited. It is important to take advantage of these generous credits as soon as possible.

If you need assistance with your business application, please contact us at 610.668.4200.