PA Tax Credit Programs
Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) Programs
Contributions through Pennsylvania's Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) programs, provide need-based financial aid to students who qualify. Individuals or businesses who make a gift to Germantown Academy through this program can receive up to a 90% tax credit to apply toward their state income tax liability.
EITC and OSTC dollars strengthen GA's financial aid in the form of restricted operating scholarship funding, making our school accessible to students who might not otherwise have the opportunity to attend.
More than 150 families, alumni, grandparents, and friends participate
Approximately 112 GA students benefit from EITC and OSTC funding each year
44% of GA's financial aid budget is supported by EITC and OSTC funds
How these programs work:
INDIVIDUAL PARTICIPATION
- Eligible individuals must have a source of Pennsylvania state income. Participation is through joining GA’s Special Purpose Entity (SPE) called Friends of Education, LLC.
- Participants sign an electronic joinder agreement and agree to a two-year commitment to receive a 90% tax credit.
- In the fall, make your contribution to the SPE.
- Early spring, a K-1 will be issued to you which will report the 90% tax credit for your PA tax liability. The remaining 10% can be filed as a charitable deduction.
BUSINESS PARTICIPATION
- Eligible businesses are those authorized to operate in Pennsylvania and subject to certain taxes, including: Personal Income Tax, Corporate Net Income Tax, Capital Stock/Franchise Tax, Bank Shares Tax, Insurance Premium Tax, and more.
- Businesses applying for credits for the first time need to submit the application through the Department of Community and Economic Development (DCED) by July 1 to be considered.
- The DCED will send a notification to all businesses that are approved, likely in the fall. From the time the letter is received from DCED, the business has 60 days to send its charitable contribution to Germantown Academy.
- GA will send a receipt, which the business must provide to the DCED within 90 days of the original approval letter. Once the receipt has been shown to the DCED, the business will receive the amount of tax credits outlined in the original approval letter.
FREQUENTLY ASKED QUESTIONS
- What is the timeline to participate?
- Why should I give in this way when I already give to the Annual Fund or other projects?
- What happens after I fulfill my two-year commitment?
- Where can I find out more about the state requirements for these programs?
