July 1, an important business deadline, is off the radar for too many businesses. This date is the application deadline for businesses that want a tax credit for making a meaningful contribution to support education in their local communities.
There are two education credits available to businesses: the Educational Improvement Tax Credit (EITC) and the Opportunity Scholarship Tax Credit (OSTC). The EITC is usually over-subscribed, so last year the budget for this was increased to $100 million. The Department of Community Economic Development (DCED), however, estimates that as much as $20 million of OSTC credits could remain unclaimed.
The OSTC credits support students whose neighborhood public schools are low-achieving. Business owners have the ability to support these schools for as little as 6.5 cents per dollar by using these credits to offset Pennsylvania's corporate net income tax, capital stock franchise tax, bank and trust company shares tax, title insurance companies share tax, insurance premiums tax, and mutual thrift institutions tax. Pass-through entities can also apply for credits.
These credits can be a great way for businesses to meet their philanthropic goals by helping children in need while also being good citizens that support the local education sector. I encourage businesses to seriously consider these opportunities. More information can be found on DCED's website www.newpa.org.
ROBERT F. FIRELY
Pennsylvania Institute of CPAs