Bethel Park Education Foundation (PA Non-profit)

Tax Exempt IRC Section 501(c)(3)

Registered as a PA Educational Improvement Organization

A business firm may receive a tax credit (EITC) equal to 75% of its contribution to an Educational Improvement Organization (EIO) that is included on the current list published by the PA Department of Community and Economic Development (DCED), up to a maximum of $750,000 per taxable year. The EITC may be increased to 90% of the contribution made, up to a maximum of $750,000 per taxable year, if the business firm agrees to provide the same amount of contribution to an organization for two consecutive years.

The EIO must contribute at least 80% of its annual EITC receipts as grants to a public school, charter school or a private school approved under section 1376 of the public school code of 1949, for innovative educational programs that meet the requirements of the Act and published guidelines. Grants may include cash payments to public schools to carry out innovative educational programs or it may include the costs incurred by an EIO in providing innovative educational programs to, or in conjunction with, public schools.

An “innovative educational program” is an advanced academic or similar program that is not part of the regular academic program of a public school but that enhances the curriculum or academic program of the public school.

EITC allows a business taxpayer to fund a local EIO to assist local public schools with PA tax dollars it would have otherwise paid into the PA general fund. That is, a business has little idea where its PA tax dollars go after they are paid into the general fund; however, when those same tax dollars are paid to BPEF, it can see the specific programs and students it is supporting and receive a PA state tax credit. These payments improve our schools and strengthen our community.  

Who can claim the EITC? Businesses that are authorized to do business in Pennsylvania who are subject to one or more of the following PA taxes: Corporate Net Income Tax (C corps – 9.99%); Capital Stock Franchise Tax; Bank and Trust Company Shares Tax; Title Insurance Companies Shares Tax; Insurance Premiums Tax; Mutual Thrift Institution Tax; Malt Beverage Tax; Insurance Company Law of 1921; Personal Income Tax of S corporation shareholders or Partnership partners but not sole proprietors.

EITC is also available to a “Special Purpose Entity.” A Special purpose Entity is a pass-through entity, the purpose of which is the making of contributions and whose shareholders, partners or members are composed of owners or employees of other business firms.

For more information on EITC go to://dced.pa.gov/programs/educational-improvement-tax-credit-program-eitc/

Why it makes good business sense to make a contribution to BPEF and claim the EITC

VALUE OF US INCOME TAX DEDUCTIONS - C CORPORATION

ASSUME - $1,000 CONTRIBUTION TO BPEF IN LIEU OF PA TAX

     PA STATE TAX IMPACT OF 2 YEAR BPEF CONTRIBUTION

TAX VALUE OF A TWO YEAR $1,000 CONTRIBUTION TO BPEF

US INCOME TAX BENEFIT -                             $    250

PA STATE INCOME TAX BENEFIT -             $      44   

PA STATE INCOME TAX CREDIT -               $    900

TOTAL TAX VALUE                                    $1,194

OVERALL RATE OF RETURN:

$194 ($1,194 – $1,000)/$1,000 CONTRIBUTION = 19.4%

NET RATE OF RETURN:

$ 44 ($49 - $5)/$1,000 CONTRIBUTION = 4.4%