Educational Improvement Tax Credit (EITC) Program
In Pennsylvania, the Educational Improvement Tax Credit (EITC) program allows businesses to receive tax credits for donating to approved educational improvement organizations (EIO) like the Media Arts Council.
Here’s how it works for a business owner:
1. Determine Eligibility
Your business must be authorized to operate in Pennsylvania and be subject to one or more of the following taxes:
Corporate Net Income Tax
Capital Stock/Foreign Franchise Tax
Personal Income Tax (for pass-through entities like LLCs, S Corps, and partnerships)
Bank and Trust Company Shares Tax
Insurance Premiums Tax
Mutual Thrift Institutions Tax
2. Apply for Tax Credits
If your business isn’t already registered, visit the DCED website to apply.
Applications open on July 1 for new applicants and May 15 for renewing businesses.
The application is submitted online through the Department of Community and Economic Development (DCED).
3. Donate to MAC, a Registered Educational Improvement Organization
The donation must be at least $1,000 to qualify for EITC tax credits.
Clearly indicate that the donation is for EITC purposes.
MAC will provide an acknowledgment letter confirming the donation and stating that the funds will be used for an approved EITC educational program.
5. Receive Tax Credits
A one-year commitment earns a 75% tax credit on the donated amount.
A two-year commitment (same amount for both years) earns a 90% tax credit.
The credit can offset up to $750,000 per tax year.
6. Use or Pass Through the Credit
The business must send proof of the donation (e.g., a receipt or acknowledgment letter from MAC) to DCED within 90 days of receiving tax credit approval.
The tax credit reduces your business’s Pennsylvania tax liability.
For pass-through entities (LLCs, S Corps, etc.), the credit can be passed through to individual owners who pay personal income tax in PA.