EITC PA Tax Credits

Support Benchmark Scholarships & Receive Tax Credits

We're lucky to live in PA - the only state where parents can provide this kind of support to schools.

Mark Muehl, parent

Did you know you could direct your PA State Tax Liability to Benchmark’s Financial Aid program in exchange for up to a 90% tax credit?

The Educational Improvement Tax Credit (EITC) Program is a way for you to make a gift to Benchmark School go even further. Pennsylvania is a unique state that permits you to direct up to 90% of your personal or corporate state tax liability toward Benchmark School.

For example: if you determine that you will owe $5,000 in PA state taxes, you can direct that to Benchmark School and pay only $500 (which is also deductible on your federal income tax). Would you give Benchmark $5,000 if it only cost you $500?

Individuals and businesses are able to participate in Pennsylvania’s EITC program by joining a SPE (Special Purpose Entity) that has already applied for tax credits from the state. You would determine your tax liability for the year, and then we can then help you find a SPE that is able to receive that money. There are a number of SPEs you can join, and some have a minimum donation requirement. Here are just a few that we have worked with in the past:
Pennsylvania Education Partnership

Some of these entities have a minimum participation amount, but it is also dependent on how much money in tax credits they have to fill. Whether you need more information or are ready to enroll, please email Lauren Ainsworth in Benchmark’s Development Office or call 610-565-3741 x149.

Benchmark awards approximately $1.5 million in financial assistance each year. Gifts through PA’s EITC program will greatly offset this amount and enable us to help more students receive the Benchmark education that they need and deserve.
 
A note about OSTC
At this time, thanks to the generosity of our community partners, Benchmark is unable to accept additional OSTC donations this year. 

Here are some answers to our frequently asked questions:


What is the difference between a credit and a deduction?
Tax credits directly reduce the amount of tax you owe, giving you a dollar-for-dollar reduction of your tax liability. A tax credit valued at $1,000, for instance, lowers your tax bill by $1,000. The EITC credit is equal to 90% of the donor’s donation, e.g., a $10,000 donation yields a $9,000 credit. Deductions, on the other hand, reduce how much of your income is subject to taxes. Deductions lower your taxable income by the percentage of your highest federal income tax bracket. If you fall into the 35% tax bracket, a $1,000 deduction saves you $350.
 
Are there restrictions?
To participate, the applicant must be a shareholder, partner, member or employee of a “business firm,” which is an entity authorized to do business in Pennsylvania. Participants may not be delinquent with their Pennsylvania state tax liabilities.
 
Is this a two-year commitment?
We ask that participants make a two-year commitment to the program. Individuals, who advise us that they may not be able to participate in year two, may withdraw at the discretion of the SPE. Likewise, individuals and businesses with a large one-time event are eligible to participate at our discretion.
 
Do both spouses need to enroll?
No, only one family member per household should enroll and that individual must be affiliated with a Pennsylvania business firm. Both spouses’ tax liability may be offset with a credit on a joint return.
 
Does this impact my Pennsylvania state withholding?
Yes. Individuals may adjust their withholding for the year. All participants are advised to seek advice from a tax professional.
 
What is the appropriate level of participation?
To maximize the leveraged nature of the program, individuals and businesses should participate in an amount equal to about 110% of their state tax liability. This program is based on the applicant’s Pennsylvania tax liability (or joint tax liability), not income, therefore each taxpayer’s situation will differ. PA tax liability is reported on Form PA-40 Line 12. These credits are not refundable. That means if someone gives more than 110% of their state tax liability, they will not receive a tax benefit for any amount that exceeds the 110% threshold.
 
Do I need to earn a particular income to qualify?
This program is based on the applicant’s Pennsylvania tax liability (or joint tax liability), not income, therefore each taxpayer’s situation will differ. As a rule of thumb, most of our members have household income of at least $200,000. All participants should consult with their professional tax advisor before participating.
 
Where do I obtain an application/joinder?
Contact Lauren Ainsworth in Benchmark’s Development Office at 610-565-3741 x149 to be connected with a SPE that has enough tax credits to accept your donation. You will then fill out an application and if accepted (which is based on timing and availability of credits), you will submit a joinder agreement with your payment.
 
When do I submit my application/joinder?
Your application may be submitted at any time during the year. Tax credits will be distributed on a first come first served basis until the tax credits which have been awarded to by the Department of Community and Economic Development are depleted. An application is not accepted for membership until the paperwork is completed and payment is received.
 
How does Benchmark receive my contribution?
On your application you will identify Benchmark School as the school to which you’d like your funds directed. Benchmark cannot receive the funds until the SPE receives its approval from the state.
 
When will I receive documents to file with my income taxes?
In February, your Federal and State K-1 forms will arrive. The Federal K-1 will list your participation and Federal charitable contribution, which you deduct on Schedule A if you itemize. Your Pennsylvania K- 1 will list your 90% PA tax credit, which will go on Payment line 23 OC for Other Credit on your PA-40.

We learned of the EITC program several years ago and immediately saw the benefit of being able to make a such a wonderful impact at our school while doing nothing more than steering our state tax dollars directly to a private school of our choice.

It brings us great joy to be able to make this annual contribution to support independent schools and all of the students that benefit from the education they receive from being able to attend a school better aligned with their needs.

At first, we were slightly confused at how the program worked, but we were easily guided by the school and it was a very easy process and has been for years now. We are so proud to have participated the previous 6 years and look forward to continuing!

Starr Vernon & Nagesh Kelkar, parents

Thank You for Your Support

The following contributions from corporations and businesses through the EITC and OSTC programs enabled Benchmark families to receive more than $3.5 million in financial aid. 

  • AIM Scholarship 1 LLC
  • AJO, LP
  • Aqua America, Inc.
  • Beneficial Bank
  • Brock Premier Culinary Services
  • Bryn Mawr Trust Company
  • Burns Engineering, Inc.
  • Business Leadership Organized for Catholic Schools (BLOCS)
  • Central Pennsylvania Scholarship Fund
  • Chek Med Systems, Inc.
  • Comcast
  • Devon Consulting, Inc.
  • DNB First
  • Elizco, Inc.
  • Employee Benefit Specialist, Inc.
  • First Niagara
  • Fishman & Tobin, Inc.
  • Glenmede Trust Company, NA
  • Graham Partners, Inc.
  • HSC Builders & Construction Managers
  • Huff United
  • Idyll, Ltd.
  • Jewish Scholarship, LLC
  • Keystone Health Plan, East
  • Manufacturers & Traders Trust Co.
  • Markel Corporation
  • Math-U-See
  • McLean Packaging Corporation
  • Montgomery Avenue II LLC
  • Mutual Fire Foundation, Inc.
  • Neurologic Health Associates, PC
  • Omni Cable Corp.
  • Origlio Beverage
  • PA Partners for Education, LLC
  • Pennsylvania Education Partnership LLC
  • Pennsylvania EITC/OSTC Scholarship #2, LLC
  • Philadelphia Insurance Companies
  • Pro-Tech Floors
  • Republic Bank
  • Ryan Advisory Services
  • S & S Realty Associates, Inc.
  • Silverback Educational Foundation
  • SKF USA, Inc.
  • SofterWare, Inc.
  • Spivack & Spivack, LLC
  • Stein Realty Capital, LP
  • Stellar Solutions LLC
  • UGI Energy Services
  • UHS of Pennsylvania, Inc.
  • Unisys Corporation
  • Utica National Insurance Group
  • Veterans Financial, Inc.
  • Wilmington Trust of Pennsylvania
  • Wind River Holdings, LP

CONTACT

Lauren Ainsworth 
Director of Annual Giving

I love the fact that I can direct my PA state tax dollars to a recipient of my choice (Benchmark School) and that the school receives ten times what I donate. In prior years the EITC program had been too difficult or "out of capacity," but the process is MUCH simpler now through the BLOCS program. I plan to support Benchmark through the EITC program for many years.

Robert Driscoll, parent

As parents of a Benchmark alumnus and business owner, I love that we can direct dollars that would otherwise be paid in taxes to a school my family cares so deeply about. It's easy to apply for EITC and the cost to the donor is minimal as you get a tax credit. With the money Benchmark receives from EITC contributions, they are able to provide the education that made a huge difference for our son available to many more students.

Emily and Brian Newmark, parents