EITC Program

There is no catch! The EITC (Educational Improvement Tax Credit) was enacted in 2001 under Governor Tom Ridge and passed with overwhelming bipartisan support. The program continues to expand with support from both sides of the political spectrum. EITC allows you to redirect your state tax dollars as a scholarship to support a scholar in pre-kindergarten through grade 12 at a private school of your choice in Pennsylvania.

Anyone who works in the state of Pennsylvania, pays taxes to the state, and earns a minimum of $18,000/year is eligible. Any business that operates in the state must pay Pennsylvania state tax and, therefore, is eligible to redirect their business taxes to Innovate Academy. The minimum amount that can be redirected is $500.

First, you must determine how much tax you will owe the state by the end of the current year. To do this:

• Determine how much you think you will make by 12.31 of the current year, and multiply it by .0307 (the current Pennsylvania state income tax rate is 3.07%) or

• Check your Pennsylvania state tax return from last year, and estimate your tax for this year based on your anticipated earnings for the year or

• Check with your tax advisor.

The EITC program provides a dollar-for-dollar tax credit of 90% of the amount of state taxes you designate to be scholarships through EITC. The remaining 10% qualifies as a charitable deduction on your federal tax return and may reduce what you owe to the Federal Government. For those that file quarterly, you may not have to file your state income tax quarterly once you are in the EITC program.

For example, if you owe $1,000 in Pennsylvania state taxes, you can choose to direct that to Innovate Academy. You will receive a $900 Pennsylvania state tax credit. If you’ve already had your Pennsylvania taxes withheld, you will receive $900 directly back to you. The $100 that is not reimbursed is considered a charitable deduction on your federal return, if you itemize.

Your Federal and State K-1 forms will arrive by the end of February. Schedules for both your state and federal return will be completed with all the pertinent information so that you simply include them with your returns. Because tax forms can change from time to time, please contact Terry Doyle for additional up-to-date information.

No. There is no mechanism for employers to stop withholding the Pennsylvania state tax from each paycheck of their employees. EITC participants write a check each year in the fall and send it to the scholarship organization that has been qualified and approved by the state. They handle the interactions between the state and the school, making sure the funds are used as scholarships for qualified students in private schools.

Since your employer already withheld the funds all year and you participated in EITC and sent money to a scholarship organization, you will receive a 90% refund—90% of the amount of the check you wrote—directly from the state of Pennsylvania. The refund typically arrives in the summer or fall.

NOTE: If you are a business and file quarterly, you will be able to eliminate the need to file your state taxes quarterly once you are in the program and you are redirecting a significant amount of what you would normally owe the state.

The EITC program allows for school choice in the State of Pennsylvania and targets those who may not be able to afford a private school education for their child(ren). Your choice to participate allows families to have a choice on their part to be able to send their child(ren) to a private school that shares your values. At Innovate Academy, families must apply and qualify to receive EITC scholarship support based on income, tax records and/or other verified circumstances. Over half of Innovate students qualify to receive an EITC scholarship.

The sooner you submit a joinder form, the sooner you get on the waiting list, the better your chances are to get into the program. EITC credits are first offered to those who have participated the previous year. When others drop out, due to a relocation, retirement, etc., or when the amount of credits available from the state increases, new participants are added based on a first-come, first-serve basis.

Yes! Parents are encouraged to spread the word about EITC! Share this website with relatives, neighbors, friends, employers, colleagues, church family, businesses you support, medical professionals you work with, etc. Anyone who qualifies can help the students at Innovate Academy! Terry Doyle is available to meet and/or speak with those who are interested.

There are so many local and recognizable businesses who participate in EITC like Comcast, Vanguard, Wawa, PNC Bank, Verizon, QVC, Peco, Aqua, Wells Fargo, Glenmede Trust, and more. Local businesses in the Delco area are great supporters of this program, but we are always looking for more.

For many companies, participation is a simple and impactful choice once they understand how easy the process is—and how significant the difference can be for families seeking a quality private education they might not otherwise be able to afford.