PENNSYLVANIA EDUCATIONAL IMPROVEMENT TAX CREDIT

In May of 2001, the Pennsylvania legislature passed the Educational Improvement Tax Credit program, allocating $20 million dollars for tax credits. This initiative encourages corporations to donate money to approved scholarship organizations for primary and secondary education.

Pennsylvania will allow a tax credit for 75% of contributions made to an approved scholarship organization or 90% of contributions for a two-year commitment. Therefore, 90% of the money that would pay Corporate Net Income Tax, Capital Stock Franchise Tax, and other taxes can instead help needy families pay tuition. Even if a business does not owe income tax, most “C” and “S” corporations still pay the Capital Stock Franchise Tax. Your accountants can approximate how much Capital Stock Franchise tax you owe in your situation. Please consult them.

If interested in contributing, please apply for the tax credit as soon as possible, and donate based on your estimated tax liability. Last year, most corporations opted for the two-year program and now have first priority to re-apply or renew last year’s tax credit. If this is your first year to donate, your application will be considered on a first-come, first served basis for any remaining funds.

The application, included with this information packet, can be completed in several minutes. You need not contribute now, just apply to the Department of Community and Economic Development for approval. Approval for EITC is based on the availability of funds. If you are approved, you have 60 days to contribute to an approved Scholarship Organization.

You benefit Belleville Mennonite School by contributing to The Mennonite Foundation, the DCED approved Scholarship Organization that manages BMS’s scholarship fund. The Mennonite Foundation administers scholarship money for BMS, as well as other participating Mennonite schools. Through The Mennonite Foundation Designation Form, also included in the information packet, you may designate BMS and other schools to benefit from your contribution. During the 2007-2008 school year, Belleville Mennonite School provided more than $19,000 in scholarships to approximately 21 families and 35 children, helping low-income households afford a quality, Christ-centered education.

This information packet includes all the necessary forms to complete for participation in the EITC program. You can also visit www.newpa.com for additional information.

Thank your for considering this opportunity to divert your tax dollars and support this life-changing educational experience. Why pay taxes when you could use the money to help a child?

Blessing,

R. Ann Kanagy
Superintendent

ACTION STEPS
Immediate steps

Help Give Education to a Child Today Through the Pennsylvania Educational Improvement Tax Credit Program

Follow these simple steps to apply today:

STEP 1: Check your estimated tax liability for one of the following taxes:
A. PA Corporate Net Income Tax (“C” corporations)
B. PA Capital Stock and Franchise Tax (“S” & “C” corporations)
C. Title Insurance Shares Tax, Insurance Premiums Tax or the Mutual Thrift Institutions Tax (if you are a financial institution or an insurance company)

STEP 2: Determine the amount of your donation.

STEP 3: Decide how much of your determined tax liability will help students:
A. 75% tax credit for the donation with a one year commitment
B. 90% tax credit for the donation with a two year commitment

STEP 4: Apply for the tax credit by completing a simple, one-page application.
1. Use the application included in BMS’s EITC packet or download the application from DCED’s website, www.newpa.com. (Search for EITC, then download the corresponding “business guidelines”)
2. Send the completed application to DCED or submit to BMS for hand-delivery to Harrisburg.

After you receive approval (30 days after application):

STEP 5: Complete a Mennonite Foundation Designation Form and designate your donation to Belleville Mennonite School.

STEP 6: Send donation and completed Designation Form to The Mennonite Foundation within 60 days of approval from DCED.

Please make your check payable to The Mennonite Foundation. You can confidentially mail your check directly to The Mennonite Foundation, or BMS will gladly receive your check and forward it to The Mennonite Foundation’s office.

STEP 7: Send proof of the donation (receipt from Mennonite Foundation) within 90 days of approval from DCED.

Thank you for partnering with Belleville Mennonite School!

Download the Designation Form (PDF file)
Download a brochure (PDF file)
Business Guidelines and Application (PDF file)
FAQ (PDF file)