Educational Improvement Tax Credit Program for Individuals
One of the most crucial funding sources of financial aid for students comes from The Educational Improvement Tax Credit (EITC) Program. This program allows businesses and individuals to direct their PA state income taxes to students instead of sending those tax dollars to Harrisburg. It is a simple and easy process that will turn the tax dollars that you already owe into scholarships and financial aid. When you make an EITC contribution, your tax dollars make a difference in your community.
The EITC program allows individuals with a Pennsylvania state income tax liability in excess of program minimums to donate to SFXCS and receive a Pennsylvania state tax credit for 90% of their donation each year. The remaining 10% of their donation is a deductible charitable contribution for federal tax purposes. These tax credit contributions will allow St. Francis Xavier Catholic School to provide scholarships to those students and families most in need.
Looking for the Joinder Agreements? CLICK HERE.
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First reach out to your accountant and determine your eligibility and to ensure excess credit money is not lost. The PA tax rate is 3.07%. Your PA state income tax liability can be found on line 12 of the PA-40 form.
Complete, sign and submit a Joinder Agreement. When you know your PA state income tax liability, you can fill out the pledge form with the amount of your contribution. This form is a request to receive the tax credit award. Please send a copy to SFXCS.
Once your request is approved for the tax credit, you will be notified by the charity your request was submitted to.
Once notified, you can send in your contribution.
After your contribution is made, your K-1 tax form will be sent to you to file with your taxes. This form will provide you a 90% tax credit on the contribution you made.
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Yes, you qualify if your individual or combined Pennsylvania tax liability meets the program minimum.
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Donors are first encouraged to speak with their tax advisor before participating in this program.
Upon acceptance, you will be asked to make an out-of-pocket donation, up to the amount of your annual state taxes. Early the following year, you will receive a K-1 statement to be used when you file your taxes in the spring. The K-1 will qualify you to receive a refund of 90% of your donation from your Pennsylvania state income tax liability.
Consider the following example based on $10,000 of state income tax liability. Households may start to participate at $1,000.
Bob Taxpayer is in the 37% tax bracket and itemizes his deductions. He sends in a Joinder Agreement to join an SPE (Special Purpose Entity), is accepted, and contributes $10,000. Bob will receive a 90% tax credit for his SPE contribution, resulting in a $9,000 PA tax credit. Also for his donation, Bob receives a $370 charitable gift deduction on his federal income tax return.
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On your Joinder Form, please note Saint Francis Xavier Catholic School in the space designated for “Name of School” and indicate the tax credit amount for which you are applying in the space designated “Amount $.”
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Yes! Each year you are contacted and asked to reinvest. If you choose not to continue in the program, simply do not complete the form and the tax credits will be available to another donor applicant.
