Learn How to Turn Your Tax Liability into Scholarships for Our Students
Launched in 2001, Pennsylvania’s Educational Improvement Tax Credit program (EITC) is a mutually beneficial initiative for businesses wishing to save on their annual taxes and also give back to the communities. The outcome for participating businesses is a reduced tax liability (both state and federal), awarded in exchange for donations to a nonprofit scholarship or educational improvement organization such as KenCrest. Individuals can also take advantage of this tax savings opportunity through a Special Purpose Entity (SPE).
One of the first things to do when considering EITC participation is talk with an accountant to determine whether traditional EITC participation or a Special Purpose Entity is more advantageous. For some, the choice will be clear, based on eligibility, but others may qualify for both – another reason EITC participation is so attractive.
For contributions to Pre-Kindergarten Scholarship Organizations (PKSO), a business may receive a tax credit equal to 100% of the first $10,000 contributed, and up to 90% of the remaining amount contributed up to a maximum credit of $200,000 annually. A business may qualify to participate if it pays Pennsylvania State Income Tax, or one of several other taxes noted on the Department of Community & Economic Development (DCED) website.
Special Purpose Entity (SPE) Information
Under SPE guidelines, a person is eligible as an individual or couple (married filing jointly) if they work in Pennsylvania and owe at least $3,500 in state income taxes. Unlike the traditional business model, there are no strict deadlines to follow, and there is a simple one-page application.
How EITC Helps KenCrest Early Learning Centers
Quality Pre‐K programs in our community cost an average of nearly $15,000 per year. For low‐income, working families in Philadelphia, this is about 33% of their household’s expenditure — often their largest expense. This article describes the struggle for many families who want to give their children a Pre-K experience but simply cannot afford it. EITC donations enable low- and moderate-income families to receive full and partial scholarships for their children to one of our seven Early Learning Centers.
Thanks to the EITC program as well as the generosity of business and individual donors, during the 2020-2021 school year, KenCrest awarded nearly $300,000 in needs-based scholarships, enabling young learners from low- to moderate-income families to attend a KenCrest Early Learning Center.
For more information about KenCrest’s EITC-approved early learning programs, contact Dawn Warden at 610-825-9360 ext. 1123 or via email at: firstname.lastname@example.org.
Click here for a downloadable information sheet about how to get started with EITC.