While there have been recent changes to Pennsylvania’s Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) programs, one thing that has not changed is the application due date.
Businesses that have completed a two-year commitment, and those that are in the middle of a two year commitment, are eligible to submit their EITC/OSTC applications beginning May 15, 2020. All other businesses wishing to participate in the program are eligible to file applications beginning July 1, 2020.
Applications must be submitted electronically using the Department of Community and Economic Development’s (DCED) Single Application for Assistance.
What Has Changed
In response to the COVID-19 pandemic, Governor Wolf signed SB 841, which includes amendments to the EITC and OSTC programs. As a result, the following changes have been enacted for tax years affected by COVID-19:
- Businesses participating in the EITC/OSTC programs are not required to make their qualifying contribution within 60 days following the approval of an application, as originally required. Organizations now have until the end of their applicable tax year to make their contribution.
- Businesses fulfilling year two of a two-year commitment and impacted by the COVID-19 disaster emergency will be permitted to receive a tax credit up to 90 percent of the amount contributed in year two, even if the contribution is less than the credit authorized in year one of the two-year agreement.
Businesses must still provide the DCED with proof of contribution within 30 days of the qualifying contribution.
The credit is eligible for use by businesses authorized to do business in Pennsylvania that are subject to one or more of the following taxes:
- Personal Income Tax
- Capital Stock/Foreign Franchise Tax
- Corporate Net Income Tax
- Bank Shares Tax
- Title Insurance & Trust Company Shares Tax
- Insurance Premium Tax (excluding surplus lines, unauthorized, domestic/foreign marine)
- Mutual Thrift Tax
- Malt Beverage Tax
- Retaliatory Fees under section 212 of the Insurance Company Law of 1921
As a firm we are to help any way we can. Should you have any questions or concerns regarding the EITC/OSTC program, please do not hesitate to contact our State and Local Tax group. We also continue to update our COVID-19 Resource Center, which you can access here.
Information contained in this alert should not be construed as the rendering of specific accounting, tax, or other advice. Material may become outdated and anyone using this should research and update to ensure accuracy. In no event will the publisher be liable for any damages, direct, indirect, or consequential, claimed to result from use of the material contained in this alert. Readers are encouraged to consult with their advisors before making any decisions.