Pennsylvania Tax Credit Programs
Did you know businesses and individuals can offset their Pennsylvania state taxes to provide crucial scholarships to Grayson School families who qualify for our needs-based tuition assistance program?
By donating to Grayson, businesses and individuals can earn a tax credit for up to 90% of Pennsylvania taxes through the Pennsylvania Educational Improvement Tax Credit (PA EITC) and the Pennsylvania Opportunity Scholarship Tax Credit (PA OSTC) programs.
Funds received under these programs provide direct support to our need-based tuition assistance program.
Please consider making a Grayson experience possible for more qualified students through these powerful programs.
In effect, it costs a dime to give a dollar!
%
of our students quality for EITC/OSTC scholarship funding
of need could be met through these programs each year
Grayson families support our EITC/OSTC program each year
How do these programs work?
Tax credits are available on a first-come, first-served basis for contributions to scholarship organizations such as The Grayson School. Credits may be applied against your tax liability for the tax year in which the contribution was made. Businesses and individuals may receive a tax credit equal to 75% of their contribution. However, participants who agree to make a contribution to Grayson for two consecutive years, may receive a tax credit equal to 90% of their contribution. In effect, it costs a dime to give a dollar!
| PA State Contribution Example $5,550 Liability/$5,550 Donation |
||
| No Contribution | Contribution | |
|---|---|---|
| PA Taxable Income | $150,000 | $150,000 |
| PA Tax Liability of 3.07% | $5,550 | $5,550 |
| EITC/OSTC Credit (90% for two years) | $0 | $4,995 |
| Estimate PA Tax Due | $5,550 | $555 |
| Gift to The Grayson School for Scholarships | $0 | $5,550 |
Frequently Asked Questions
What is the Pennsylvania Tax Credit Program (EITC/OSTC Tax Credit Programs)?
The Pennsylvania tax credit program provides low/middle-income children and families residing in Pennsylvania with much-needed tuition assistance. This program provides tax credits to eligible businesses and/or individuals that may be applied against their tax liability for the tax year in which the contribution is made.
How does the Pennsylvania Tax Credit Program benefit The Grayson School and its students?
The Grayson School is committed to maintaining a diverse community across multiple dimensions, including socioeconomic planes. We believe that diversity and equity are essential aspects of providing an optimal education for gifted students. While exceptional ability knows no boundaries, inequitable access to financial resources may prevent gifted students from reaching their potential. Providing adequate and appropriate resources and identifying and meeting the needs of all our students is central to our mission.
EITC/OSTC funds are critical in helping us meet these commitments. These funds are 100% dedicated to scholarships that are based on a family’s financial need. The tax credit program makes it possible for extraordinarily gifted students, who would otherwise be unable to afford a private school education and gain the full benefits of a Grayson School education.
What is the impact of EITC/OSTC scholarship money for The Grayson School and our students?
Pennsylvania does not offer financial support for gifted education. The tax credit program, therefore, provides the necessary funding for high-ability children to receive the education they deserve. During the 2022-2023 academic year, Pennsylvania tax dollars directed to Grayson through the program covered approximately 75% of our financial aid scholarships.
Who is eligible to participate in the Pennsylvania Tax Credit Program?
Individuals/couples with a Pennsylvania Personal Income Tax liability of at least $3,500 annually* are eligible to participate. Companies authorized to do business in Pennsylvania that are subject to one or more of the following taxes may also apply.
- Capital Stock/Foreign Franchise Tax
- Corporate Net Income Tax
- Bank Shares Tax
- Title Insurance & Trust Company Shares Tax
- Insurance Premium Tax (excluding surplus lines, unauthorized, domestic/foreign
marine) - Mutual Thrift Tax
- Malt Beverage Tax
- Retaliatory Fees under section 212 of the Insurance Company Law of 1921
*Our primary Special Purpose Entity (SPE) partner, Central Pennsylvania Scholarship Fund (CPSF), requires a minimum donation of $3,500; but some SPEs allow for donations beginning at $3,000. Every donor will need to check with each SPE for specific requirements.
Do I need to earn a particular income to qualify to donate?
This program is based on tax liability, not income, therefore each taxpayer’s situation will differ. However, in general, the minimum amount of money you must make is approximately $115,000/year (either individually or if filing jointly) to be able to donate $3,500. To easily see if you may qualify, you can find your Pennsylvania tax liability on Form PA-40 Line 12 of your most recent tax returns.
You do risk the chance of losing your tax credit if you choose an amount over your tax liability, so it’s essential to make sure you have a clear understanding of your anticipated annual state taxes.
Please consult your tax or financial professional to seek any financial-related advice.
What if I need additional information?
Please contact Kristen Luke Brooks, Director of Development at The Grayson School.