EITC and OSTC FAQs
What kind of tax credit might I expect?
Tax credits equal 75% of a business’ contribution up to a maximum of $750,000 per taxable year. This tax credit can be increased to 90% of the contribution if the business agrees to provide the same donation for two consecutive years.
Businesses authorized to conduct business in Pennsylvania, and subject to one or more of the following taxes, may be eligible for the EITC and/or OSTC programs:
- Personal Income Tax
- Corporate Net Income Tax
- Capital Stock/Foreign Franchise Tax
- Bank Shares Tax
- Title Insurance & Trust Company Shares Tax
- Insurance Premium Tax (excluding surplus lines, unauthorized, domestic/foreign, marine)
- Mutual Thrift Institution Tax
- Malt Beverage Tax
- Retaliatory Fees under Section 212 of the Insurance Company Law of 1921
Individuals must either work for, or own, a for-profit company in Pennsylvania, or have a tax status of Married Filing Jointly with a spouse who works for, or owns, a for-profit company in Pennsylvania.
How can I apply?
Businesses must submit an online application, which is available through the PA Department of Community and Economic Development.
There are two easy ways to do this:
1. Apply for Credits Directly through the State: Businesses can submit an online application to the state of Pennsylvania for tax credits. This link provides you with step-by-step instructions for completing the application process.
2. Participate in the Tax Credit Program with a Special Purpose Entity (SPE): Donors (either individuals or businesses) can enter into a joinder agreement with a qualifying SPE and then make the donation to the SPE. The SPE will then forward the funds to the preferred organization (in this case, WT). More information about SPEs can be found here.
What are the differences between applying directly with the state and working with an SPE?
Working directly with the state requires following their application deadlines (mid-May or early July) and making contributions in a specific period of time as mandated by the state (within 60 days of receiving approval for the tax credit).
SPEs offer more flexibility with timing, but require a two-year commitment of $3,500 each year (minimum).
Individuals can also participate in the EITC/OSTC program when working with an SPE. Individuals must either work for, or own, a for-profit company in Pennsylvania, or have a tax status of Married Filing Jointly with a spouse who works for, or owns, a for-profit company in Pennsylvania.
What are the terms?
An approved business must make its donation within 60 days of receiving approval for the tax credit; the business must provide proof that the donation was made within 90 days of receiving approval. WT provides all EITC donors with an acknowledgment letter for this purpose. Reporting is made to the PA Department of Community and Economic Development (DCED)