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EITC/OSTC

Do you pay Pennsylvania income taxes? Why not donate them to Archbishop Carroll?

Through the Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) programs, businesses and individuals can redirect their PA tax dollars to help provide scholarships for underserved students. These programs allow donors to receive up to a 90% tax credit against their personal PA state tax liability.

Carroll is excited to partner with BLOCS (Business Leadership Organized for Catholic Schools) in securing donations through the EITC and OSTC programs. BLOCS mission is to provide tuition assistance scholarships to low-income families seeking an Archbishop Carroll education as an alternative to their neighborhood public school.  Families are eligible if they meet the income and geographic guidelines established by the state.

How does the process work?

  1.  An individual or legal entity (the “contributor”) can avail themselves of this opportunity by becoming a member in the BLOCS Scholarship LLC (“BLOCS”), and committing to a two-year contribution of at least $5,000 per year. Net of tax benefits, a $5,000 contribution will result in an approximate $500 per year cash outlay. BLOCS has limits as to the total amount of contributions it may receive and requires the contributors to be “Accredited Investors” (as defined in federal and state law).
  2. The actual tax benefits will be communicated to the contributor via a Form K-1 and can be applied as a credit to the contributor’s PA Tax Liability. There may be additional Federal and AMT Tax Liability reductions, depending on the contributor’s tax status.
  3. The same procedure is followed for the second year of the member’s commitment.

An example of how the credit works

Sample calculation for LLC, Partnership or S-Corporation (2-year commitment):

Cash to Charity                                                                                                  $10,000
PA Tax Credit Reduction (90% of contribution)                                             (9,000)
Net Federal Tax Reduction for contribution (37% tax rate)                           (370)*
Out of Pocket                                                                                                        $630

Which businesses are eligible to participate?

Businesses authorized to do business in Pennsylvania and who are subject to one or more of the following taxes may apply for EITC and OSTC:

  • Corporate Net Income Tax
  • Insurance Premiums Tax
  • Capital Stock Franchise Tax
  • Mutual Thrift Institution Tax
  • Bank and Trust Company Shares Tax
  • Title Insurance Company Shares Tax
  • Personal Income Tax of S corporation shareholders or Partnership partners

Business Application Timeline:

  • May 15 – Business applicants who have fulfilled their two-year commitment and wish to reapply in FY 19/20 to renew their two-year commitment.
  • May 15 – Businesses who are in the middle of their two-year commitment.
  • July 1 – All other businesses, including initial applicants and those applicants wishing to submit an additional application on top of their previously submitted two-year commitment.

Please consult your tax advisor on specifics.

 This program is nearly too good to be true and a great opportunity to support Carroll at a significantly lower cost than making any other type of cash charitable contribution. By participating in the EITC/ OSTC program you will receive a 90% PA tax credit while helping make an Archbishop Carroll education possible for the many students who rely on financial aid!

Questions?

Please contact Nora McGeever, Director of Institutional Advancement,  at 610-688-7610 x 149 or nmcgeever@jcarroll.org