EITC & SPE Tax Credit Programs
There are two programs that allow Pennsylvania taxpayers to receive significant tax credits when they donate to an educational non-profit organization.
Your participation in these tax credit programs provides CRUCIAL funds to St Leo the Great Catholic School.
These funds are used exclusively for needs based financial aid – assisting us in our goal of removing financial concern as a barrier to a Catholic Education.
Approximately 40% of our student body receives needs based financial aid, and this need grows each year.
Educational Improvement Tax Credit (EITC)
The EITC program allows businesses to receive 90% tax credits when they apply to the program and then make the appropriate donation to an educational non-profit.
All Catholic Schools are educational non-profits so this works out very well for us!
EITC is great, but is limited to businesses. The paperwork is kinda complicated and acceptance is NOT GUARANTEED.
Special Purpose Entity (SPE)
The SPE program exists because some legislators wanted there to be a way for individuals to receive the same benefit that businesses got through the EITC program.
In fact, the SPE that you join when you participate in this program applies for EITC funds. So Special Purpose entities are essentially “pass through” entities that allow individuals to participate in a program reserved for businesses.
SPE, without a doubt, is awesome!
Using the SPE program an individual can receive a 90% tax credit, just like a business. Rather than directly donating to the educational non-profit, you “invest” in the SPE and the SPE sends your investment to the non-profit of your choice.
Hypothetical Example of How SPE Works
- A participant determines they usually have a $4000 PA State Income Tax liability on an annual basis.
- They complete the Joinder Agreement to participate in the SPE (Special Purpose Entity) around this time (in the summer) and pledge $4000.
- In the Fall (Late October / November) the SPE sends them a letter asking them to make their contribution to participate.
- The participant sends $4000 to the SPE which will benefit St Leo The Great School.
- In February, they receive a K-1 form that indicates they are to receive 90% of the $4000 donation as a tax credit from PA ($3600).
- They file the K-1 with their taxes and receive a refund from PA in the amount of $3600 (again 90% of the donated amount).
- The $400 difference can be claimed as a deduction on your Federal Tax Return.
- The FULL $4000 participation amount is paid to St Leo’s and used EXCLUSIVELY on NEEDS BASED financial aid.
The Bottom Line
Whether you are a business or an individual – you are going to pay PA Taxes each year.
The only question is:
Where do you think those dollars will do the most good – St Leo the Great Catholic School or The Capitol Building?
How to Participate
Just complete this simple form and a member of our development team will reach out to you!
A Very Special Thank You!
St. Leo’s gratefully acknowledges those companies that are participating in the program and designating St. Leo’s as a recipient of this tuition assistance.
EITC Donors Include:
- CM3 Building Solutions
- Drevna Physical Therapy Associates
- Foot & Ankle Associates Of Lancaster
- Hot Z Pizza
- Penn Coat Inc.
- Red Barn Consulting
- Tomlinson Bomberger Landscaping
- Tomlinson Bomberger Pest Control
- Warfel Construction
- Wire Mesh, Inc.