EITC Frequently Asked Questions:
- What type of business may participate in the EITC Program?
A. Types of Entities:
Ø Corporations
Ø Partnerships
Ø S-Corporations
Ø LLC’s – Multi member
Ø LLP’s
B. The Entity must pay one of the following PA Taxes:
Ø Corporate Net Income Tax
Ø Capital Stock & Franchise Tax
Ø Personal Income Tax on S-Corp PA Business Income
Ø Bank and Trust Company Shares Tax
Ø Title Insurance Companies Shares Tax
Ø Insurance Premiums Tax
Ø Mutual Thrift Institutions Tax
- How much of a PA Tax Credit may a business receive?
Ø 100% tax credit up to $10,000.00 and 90% thereafter if the business chooses the Pre-K Program. Not to exceed $150,000.00.
Ø 75% tax credit up to $300,000.00, if the business chooses the K-12 (SO) Program.
Ø 90% tax credit up to $300,000.00 if the business elects a two year commitment for the K-12 (SO) Program.
- How does the business participate?
Ø Completes a simple one page application
Ø Fax the application to the state
Ø Receives a letter within a few weeks from the state approving the tax credit
Ø Writes the check to Dayspring Christian Academy Scholarship Organization within 60 days from the date of the approved state letter
Ø Receives a receipt letter from Dayspring Christian Academy Scholarship Organization and faxes the letter to the state.
- Does the business continue to pay in their state tax estimates if they expect to receive a PA Tax Credit?
Ø The business could reduce the amount of estimates they pay in by the amount of tax credit they expect to receive from the EITC tax credit. Contact your tax accountant to verify what your adjusted estimated tax payment should be.
- In what year does the Tax Credit apply to the PA Taxes of the business?
Ø The year the business sends the check to Dayspring Christian Academy Scholarship Organization is the tax year in which the PA Tax Credit will be applied.