Business Donors Redirecting your Pennsylvania taxes to your local schools
July 1st | Initial Application for tax credits An initial donor requests tax credits on July 1st each year. Initial donor applications are typically waitlisted or donors are offered alternative OSTC tax credits due to the extremely high popularity of Pennsylvania EITC tax credits. July 1st applications were waitlisted in 2015 and 2016. Our charity offers donors alternatives by using our free application assistance. We get your application processed correctly and on the correct day. Should your tax credit request get waitlisted we offer you alternatives using donor advised swaps and Special Purpose Entity credit alternatives. Your tax credits are issued by DCED in an award letter that gives you 60 days to make your donation to a qualified organization which then provides scholarships to children at the school of your choice. The tax credit of 90% is then posted to your tax account. Selecting a donation amount that does not exceed your Pennsylvania tax liability is important as the tax credit award is a use it or lose it award.
May 15th | Renewal Application for tax credits
On May 15th each year a renewal application allows donors to continue annually to get tax credit award letters in return for donations within 60 days of the award letter. The second year renewals need to be for the same amount as the first year donation. In the third year you can select a new donation amount for the next two year cycle. Our charity volunteers can help you make sure your renewal applications are input on the correct day and processed while communicating with your company CPA and CFO.
Banks & Insurance Companies
Banks use the Pennsylvania EITC award on their Pennsylvania shares tax return and the award letters and resulting tax credits can offset tax estimates due each March 15th or these deposits are refunded the following year when the shares tax return has tax credits and estimated payments in excess of tax liabilities. Insurance companies use the Pennsylvania EITC award on their Pennsylvania premiums tax return and the award letters and resulting tax credits can offset tax estimates due each March 15th or these deposits are refunded the following year when the premiums tax return has tax credits and estimated payments in excess of tax liabilities. Our charity can assist you in the application process and allow your donation funds to be on deposit year round. Your company receives one qualified thank you letter that guarantees the processing of your tax credit properly. This process avoids the errors caused by multiple thank you letters and multiple charity donations where due diligence regarding the charities EITC qualified status in your gift category is required for each gift. Your company still advises where the charity funds go and get full credit for the gift to the education charity of your choice.
PassThru Entities- S corporation, partnerships, SPE LLC
Pennsylvania tax credit awards are posted to the businesses tax credit account. The business entity then awards the Pennsylvania EITC tax credit to the business owners on a federal and Pennsylvania K-1 tax reporting form. The business also transfers the EITC tax credit manually from the business account to a personal account using a Pennsylvania REV-1123 form. Our charity volunteer CPA assist your tax preparer in making sure this transaction is handled and reported properly.
Spe Special Purpose Entities
Our charity works with several volunteer special Purpose Entities (SPE) which allow you individually to receive Pennsylvania EITC tax credits up to your individual joint liability. You must be an accredited investor which is defined as a person with $1 million or more in net assets OR $200,000 in individual annual income. Your investment funds pass through the SPE to Central Pennsylvania Scholarship Fund where they all go out to the school of your choice in a scholarship under the EITC rules. You can preorder tax credits at any time and your investment is not due until the SPE award letter arrives. Investment must be made within 60 days of the award letter date so the SPE can claim the tax credits for you. The tax credits are passed through to you on an individual federal and Pennsylvania K-1tax form each February to go with your individual PA 40 tax form and claim your Pennsylvania tax refund.
You declare your school choice to the SPE manager and our charity facilitates the disbursement of your funds to your school chosen by awarding scholarships and disbursing funds following the DCED guidelines for awarding scholarships and proper annual charity reporting and registration.
Volunteer EITC CPA
EITC Application | Award Letters
EITC applications and award letter management are services offered by our charity so you get the best chance to obtain a Pennsylvania EITC tax credit and can give your donation to the charity if your choice. Your award letter needs to turn into a tax credit on your tax account and our volunteer CPA works with your tax preparer to assure your tax credit is handled properly and efficiently without any problems or surprises.
Transfer Forms | Tax Notices
Transfer forms along with K-1s are necessary to get your tax credit in the proper account when your donating entity passes the tax credit to a donor. Pennsylvania tax notices do occur frequently during this transfer process because the Pennsylvania Department of Revenue has a system for corporate/business tax credit accounts and a seperate independent system for individual tax credit tracking. DCED which originates the credit also has a due diligence process before the tax credit is even transferred to your tax account at the Pennsylvania Department of Revenue. Our volunteer charity CPA helps your company and personal tax preparer submit your Pennsylvania EITC documents correctly the first time and respond to any tax notices promptly so there are no surprises.