EITC / SPE
EITC for businesses and individuals
Pennsylvania’s Educational Improvement Tax Credit program allows qualifying individuals and businesses to donate their state tax liability to an approved scholarship organization, including Bishop Carroll.
Participating in EITC is possible at little to no cost to the donor and makes a major impact on Bishop Carroll’s ability to provide need-based financial aid to families. Bishop Carroll is now partnered with RedefinED Advisors to help grow the EITC contributions.
To find out if you qualify, contact Head of School at x106 or at [email protected].
Educational Tax Credit Program
Special Purpose Entities
Quick Reference Sheet
- Minimum contribution amount of $3,500
- Individuals must earn a minimum of $115,000 in state taxable income individually or together, if filing status is Married Filing Jointly
- Individuals or couples (Married Filing Jointly) - one must work for a business or own a business
- Business or individual receives credits against Pennsylvania State Taxes for 90% of that amount each year.
- Example of minimum donation:
- Business or individual makes a contribution of $3,500
- $3,150 is used as credits against State taxes
1. Completing Joinder Agreement
a. Sign Joinder Agreement
b. Return Joinder Agreement to:
444 Irvins Hill Road
Tyrone, PA 16686
2. Making Initial Capital Contribution
a. RedeinED Advisors will contact the donor when it receives notification that it has been awarded tax credits and request the donor’s initial capital contribution. The donor will receive a copy of the award letter from the DCED with the letter requesting any capital contribution. The Central Pennsylvania Scholarship Fund has 60 days from the date on the letter to collection all capital contributions and make a donation to the Central Pennsylvania Scholarship Fund.
b. Donor sends their capital contribution directly to the Special Purpose Entity that they are a member of.
c. The Central Pennsylvania Scholarship Fund via numerous Special Purpose Entities acknowledges receipt of the capital contribution with the donor.
3. Activity in the Year Following the Donation
a. The donor will receive the following tax documents from their partnership in the Special Purpose Entity in February:
- PA Department of Revenue form 1123 for the SPE – Verifies that the tax credit exists for the SPE and the member’s personal portion has been transferred to their Tax ID or Social Security Number when filing PA State Income Tax Return
- Schedule K-1 – Indicates the members share in the SPE and used when filling Federal Income Tax Return
b. The school will receive 100% of the donor’s contribution for tuition assistance in the next school year.
c. The state of Pennsylvania begins processing EITC tax credits on July 1. Credit disbursements happen usually beginning mid-end of August.
* Please consult your tax advisor for questions regarding your specific tax status.