Enacted by the Pennsylvania Legislature in 2001, the Educational Improvement Tax Credit (EITC) Program provides a tax credit to businesses that pay Pennsylvania‘s corporate income tax for contributions to scholarship organizations that give private-school scholarships to eligible children. Mercy Vocational High School (MVHS) is an approved EITC scholarship organization.

Entities eligible to apply for EITC are businesses authorized to do business in Pennsylvania that are subject to the following taxes: Corporate Net Income Tax, Capital Stock Franchise Tax, Bank and Trust Company Shares Tax, Title Insurance Companies Shares Tax, Insurance Premiums Tax, Mutual Thrift Institutions Tax, and Personal Income Tax of S corporation shareholders or in a general or limited partnership.

Tax credits may be applied against the tax liability of a business for the tax year in which the contribution was made. A tax credit of 75% of Pennsylvania State Taxes is granted for a one year tax commitment. A 90% tax credit is granted for a two consecutive tax years commitment.

Benefits to MVHS

EITC is win-win situation, for regional corporations and for MVHS. Corporations can direct a part of their tax bill to charity and MVHS can fund tuition for students who otherwise would not be able to benefit from the vocational training and life lessons they will learn at Mercy Vocational High School. Funds from EITC go directly to the families’ portion of school tuition. Almost 65% of Mercy’s student population comes from low-income households thus the need for tuition assistance grows every year.

Applying is Easy: A one page application is all that is needed to apply to the state for tax credits through the EITC program. Once a confirmation letter is received from the state, a corporation has sixty days to make their donation. Businesses can then earmark their donation to MVHS.

There is a yearly statewide cap and tax credits are awarded on a first-come, first-served basis by date received. Applications for FY 12-13 will be accepted beginning July 2, 2012 (July 9 for pass through credits). Those businesses applying for the 2nd year of their applications may apply May 15-June 30, 2012. More information can be found at: http://www.newpa.com/eitc

During the 2010-2011 school year, Mercy Vocational High School received $206,750 in EITC support and offered tuition assistance to almost 128 families.

Contact Linda Leighbody, Director of Advancement, at 215-226-1225, Ext. 146, for more information.

MVHS encourages businesses to consult a tax advisor in order to maximize the benefits of the EITC program.