An under-utilized Pennsylvania tax credit—the Educational Improvement Tax Credit1—offers taxpayers2 a philanthropic opportunity at little-to-no after-tax cost. The program enables taxpayers to contribute to scholarship organizations, pre-kindergarten scholarship organizations, and educational improvement organizations that have been approved by the Department of Community and Economic Development.3 For each dollar contributed,4 a taxpayer can receive up to a 90 percent Pennsylvania tax credit5 applicable against most Pennsylvania taxes.6
The application process consists of a straightforward, one-page form.7 Applications for the 2009-2010 program can be submitted to the Pennsylvania Department of Community and Economic Development starting July 1, and are accepted on a first-come, first-served basis.
So, if your company is looking for opportunities to continue to be charitable in these challenging economic times, consider the Educational Improvement Tax Credit. With a 90 percent state tax credit, plus any applicable federal charitable contribution deduction, a taxpayer's participation in the program will help promote education and could literally cost nothing on an after-tax basis.