Why Should My Business Support Family Choice Scholarships?

Business owners are making a real difference for thousands of Pennsylvania students. Because of the historic partnership with the Educational Improvement Tax Credit (EITC) and programs like the Family Choice Scholarship, parents are choosing from a broad menu of educational options.

From escaping chronically failing, underperforming schools to providing a religious, value-based educational experience, the reasons for choosing private school vary, but the response from students and parents is consistent – gratitude.

Since the program’s inception, the EITC has helped tens of thousands of Pennsylvania families, and provided millions in tax credits to supportive businesses.

FAQ’s for Businesses

Q. What are the eligibility guidelines for EITC?
A. Once approved for the tax credit, businesses can receive up to a 90% tax credit and up to {$400,000} per taxable year if they contribute the same amount to the Family Choice Scholarship Program for two consecutive years. Please note that a business that contributes for just one year will still receive at 75% credit.

Contributions to the Pre-K Family Choice Scholarship Program are eligible for a 100% credit up to the first $10,000 given. Donations above that amount receive a 90% credit, up to $200,000 per taxable year. In addition to tax credits, businesses can also potentially be eligible for a federal tax deduction.

Q. What businesses qualify?
A. Businesses in Pennsylvania that pay any of the following taxes qualify for a tax credit:

  • Corporate Net Income Tax
  • Capital Stock Franchise Tax
  • Bank & Trust Company Shares Tax
  • Title Insurance Companies Shares Tax
  • Insurance Premiums Tax
  • Mutual Thrift Institutions Tax
  • Personal Income Tax of S Corporation Shareholders or Partnership partners (pass-through entities)

Q. What portion of each contribution goes directly to student scholarships?
A. Upwards of 93% of revenue to the Family Choice Scholarship Program goes directly to student scholarships— much more than the 80% required by the State. In certain situations, that percentage is even higher.

Q. Can a business direct or designate scholarship recipients?
A. Yes. Under certain conditions, the Family Choice Scholarship Program permits business contributors to make general designations for disbursement of scholarships funded through their contributions. For example, a contributor can ask that the contribution be used for eligible students in a geographic area, or attending a specific school so long as such designations do not violate the goals and missions of the Pennsylvania Family Institute or the Family Choice Scholarship Program, and meet the guidelines of Act 2001-4 and the Internal Revenue Code.

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