Individuals since 2014 can redirect their Pennsylvania personal income taxes to the school of their choice as scholarships. A 90% Pennsylvania EITC tax credit is available to offset the donation given. A list of schools who have benefited from these tax credit scholarships is available at this link.
Special Purpose Entity LLCs (SPE) for Individuals
An individual donor reserves an EITC tax credit in advance by completing a non binding SPE joinder form. When the SPE is awarded a DCED EITC tax credit by award letter the donor is billed for their donation. Once the SPE is full and the DCED award letter donation limit has been reached a group donation check is written to Central Pennsylvania Scholarship Fund (CPSF). This check creates the credit for all the individual members when the CPSF thank you letter is delivered to DCED. Each donor on their joinder form can select a tuition based preschool or K-12 school to offer scholarships from their donation.
Individual Donor Requirements
Individual donors must:
- Donate at least $3,500 in one check to the SPE. This translates to a tax credit of $3,150 which will be used/refundable if donors Pennsylvania income is $102,606 or higher.
- Individual donors need to work for a business (W-2) or own a Pennsylvania business to use the SPE EITC tax credit. Owning shares in a public company that does business in Pennsylvania like Netflix, Walmart, Apple or Ford counts as “owning a Pa business “.
- Individual donors must file a Pa 40 individual or joint tax return for the year and include the 90% payment (tax credit) on page 2 line 23 other credits. A complete form OC is also required. A Pa SPE K-1 will be provided by mail in February so the donor has proof of their eitc tax credit.
A donors school is contacted with their scholarship award and donors name in the month the final funds arrive from the SPE by check to Central Pennsylvania Scholarship Fund. The school officials provide scholarship forms and verification of income for students eligible to receive scholarships. Once scholarship applications are received the charity sends the school donors scholarship funds by check with a list of students receiving scholarships. 100% of donors funds are used for scholarship.
Existing individual Donors
Existing donors get preference to receive available EITC tax credits. Annually in July existing fall donors are contacted to renew their donation or change their donation amount up or down as well as withdraw from the program. In the fall existing donors are billed first for their donation. Annually in January Spring donors are contacted to renew their donation or change their donation amount up or down as well as withdraw from the program. In the spring existing donors are billed first for their donation.
Network of Individual Donors and Schools
Central Pennsylvania Scholarship Fund is a network of schools and donors who individually participate in the Pennsylvania special purpose entity SPE program. CPSF simply facilitates the process with passionate employees who explain the program and coordinate the donation process for many schools and donors in Pennsylvania. Thank you to all our past and present donors and participating schools. Our charity would not be successful without such a strong network of donors and schools.