Individual EITC Tax Notice for Form 1123

Some donors are getting Pennsylvania tax notices requesting an additional copy of the Form 1123 filed with Pennsylvania.  Our charity filed all 1123's for all special purpose entities (SPE's) in April 2021 for 2020 tax year.  We sent this directly to a Pennsylvania Department of Revenue employee who specializes in EITC and she stated that all 1123's were upload but put in a "hold file".  The reason for the hold is PA Department of Community and Economic Development issue the 2020 tax credits to the PA Department of Revenue.  These credits are issued all at once in June 2021.  As soon as this master list of PA EITC credits is sent to PA Department of Revenue then our 1123's will be removed from the hold and processed.  This is why all refunds for EITC don't happen until July and why to speed things up in July you need to contact the Department of Revenue to process your refund.  

EITC Tax Notice received now

You are welcome to respond via email or mail.  We included a form 1123 with your K-1 packet.  You simply need to mail in the whole packet with the notice to the PA Department of Revenue.  You can also email the packet to the special address given.  This response will do absolutely nothing but you are welcome to do so.  Your return will still be on hold until the master list of tax credits get delivered to the PA Dept of Revenue.  This master list is from thank you letters and proof of donations we sent to PA DCED in January but some donors do not get their thank you letter proofs in and have to be called and this is why the master list is delayed.  The PA DCED only has 3 employees to do the calling and they are only assigned part time to EITC.  

EITC action you can take in July

The best course of action is to contact the Pennsylvania Department of Revenue about your refund in July when they can clear your return to the refund unit for processing a refund check.  One contact is all you need to make.  You can contact via MyPath which is an online contact process or via the PA ask a question link or by phone via the local PA revenue office or the tax credit option on the state individual phone help line.  

What if I take no action?

This is what I do every year and eventually they pay me my refund when they get to my personal return and process it.  The delay is frustrating but until the PA Department and PA DCED figure out a nonmanual system for doing these EITC posting this is the system that has developed and some very dedicated hard working state workers are really making an effort to get refunds out as soon as possible this year.  Once the specialist at Pennsylvania Department of Revenue figured out the master list of EITC credits was not uploaded and the 2020 1123's were on hold they did suspend sending out individual notices to taxpayers but many early filers have gotten or are getting notices so we wanted to post an update to help as best we could.

K-1 packet with 1123's 

The 2020 K-1 packet with 1123's was mailed out in February so if you are a donor or accountant of donor and don't have your K-1 packet to do your taxes or to respond to the PA tax notice we can email you a duplicate K-1 packet.  Contact Tami or Kim at our office by phone and they will send you a duplicate 2020 K-1 packet.  

EITC donors and accountants

Thank you for participating in the EITC program!  This refund delay and communication with PA Department of Revenue is the one difficult part of participating in the EITC program but the good news is if you do nothing but ask for a refund the process will eventually work itself out.  I prove that every year by doing nothing.  If you or your accountant do want to try to speed the process up or communicate with the state to issue your refund we are here for you to help make this process as easy as possible.  Thank you again for participating in the PA EITC SPE program.  Without your support many school children would not be able to attend the schools they currently attend.