Participation in a Special Purpose Entity
What is a SPECIAL PURPOSE ENTITY (SPE)?
An SPE is a pass-through partnership that exists solely for the purpose of earning Educational Improvement
(or Opportunity Scholarship) Tax Credits. The Central PA Scholarship Fund (CPSF) is a non-profit that administers
various SPEs at no cost to the school.
Who Qualifies to Participate as a donor?
Any individual or any corporation who pays PA income tax is eligible. There are also options available to individuals who work for non-profits and retirees. CPSF acts as an intermediary, providing individuals and companies who would ordinarily have trouble giving to EITC and OSTC because of their structure another option to utilize these worthwhile programs. The minimum donation to join the SPE is $3,500.
Who Qualifies as a Recipient?
Any tuition-based school, Pre-k through 12th grade, in the state of Pennsylvania qualifies to receive scholarships through CPSF. The school receives 100% of the donors contribution to be used for scholarships at the school.
Why donate through an SPE?
Donors will receive a 90% state tax credit for their donation. So a donation of $10,000 will result in a $9,000 state tax credit. The 10% that cannot be used as a state credit can be used as a charitable donation deduction on the donors federal tax return.
How does it work?
Donors will complete a Joinder Agreement (simple one-page document) which acts as a reservation for the amount of credits you wish to apply for. You will need to estimate your current tax year Pennsylvania liability for your planned donation. The reservations are taken on a first come, first serve basis. The form can be requested by emailing firstname.lastname@example.org. The check will be requested once credits are assigned to the donor.