The Pennsylvania Legislature expands the Educational Improvement Tax Credit (“EITC”) Program

Individuals and businesses should contact their tax professional to learn how to zero out their PA income tax liability and give the money to their preferred private school instead.

Pennsylvania’s 2022-2023 fiscal budget included a windfall for private schools that offer K-12 education. This year, the Pennsylvania Legislature significantly expanded the EITC program. The EITC program allows donors to effectively zero out their state income tax liability by making gifts to the private schools of their choice. The private schools must use a portion of the gift to support students with the greatest financial need.

How can Pennsylvania Taxpayers take advantage of the EITC Program?

The EITC program offers a reduction of up to 90% of one’s tax liability to an approved 501(c)(3) organization which uses the money to support students. Simply put, a $10,000 donation will zero out $9,000 in Pennsylvania state income taxes. The remaining $1,000 of this $10,000 gift is eligible for a charitable contribution deduction on the taxpayer’s federal return. Instead of sending their Pennsylvania tax dollars to the state Treasury, participants are permitted to redirect their money to the private school(s) of their choice for little cost.

For more information about the EITC program, check out our FAQ Section.

Can Individuals Participate?

Businesses can participate in the EITC program directly. However, individuals can only participate by joining a special purpose entity (“SPE”). A SPE can accept an individual’s donation and remit the funds to the school(s) of the donor’s choice. Friends of Education offers SPEs at no cost to the donor. That means, any individual who wants to make a tax-advantaged donation to the private school of their choice, should contact Friends of Education.

About Friends of Education

Montgomery County Scholarships Inc. d/b/a Friends of Education is a Pennsylvania-based 501(c)(3) organization. Friends of Education has raised millions utilizing EITC annually for students. The EITC program helps students of need obtain a private school education. By giving a little, you can help a lot! Visit our website for more information.