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The 5 Best Things about the Education Improvement Tax Credit (EITC) and Educational Improvement Organizations

The Education Improvement Tax Credit (EITC) program was enacted in Pennsylvania a few years ago to allow businesses in the Commonwealth an opportunity to redirect their state income tax dollars to tuition based schools and help those children in need of tuition assistance.  Many organizations have been created in the meantime to allow High Net Worth Individuals to participate as well.

Given the Tax Cuts and Jobs Act of 2017, and specifically the SALT deduction limitations, this tax/charitable planning tool has become even more valuable.

Below are the 5 Best Things about EITC:

  • Redirect your Pennsylvania state income tax dollars to a tuition based school to fund a child’s education via an Educational Improvement or Scholarship Organization such as BLOCS, The Foundation for Catholic Education, Foundation for Jewish Day Schools of Greater Philadelphia and more.

  • Receive up to 90% of your contribution back as a credit on your PA tax bill

  • Receive a Federal charitable deduction equal to your contribution to the educational improvement or scholarship organization

  • The combination of state and Federal tax benefits often means the participants in these programs receive more money in return than what was initially contributed

  • Participation in these programs can essentially eliminate the $10,000 cap on state and local income tax (SALT) deductions that were put in place with the passage of the Tax Cuts and Jobs Act of 2017

Please do not hesitate to reach out to us if you would like to learn more about EITC, Educational Improvement Organization and how these programs can positively impact you and the community at large.