educational improvement tax credit program (EITC)

The PA Department of Community and Economic Development operates the Educational Improvement Tax Credit (EITC), a tax incentive available to for-profit companies based in PA or conducting business in the state, that benefits eligible educational nonprofits, including The Tull Family Theater. 

This tax credit program enables companies to direct contributions to specific educational organizations instead of paying taxes to the state. Companies must apply and be accepted into the program and, thereafter, renew their applications. The state allocates only a specific amount of tax credits for EITC every year. While most of these funds are directed toward schools, 20% of the overall amount received can be shared with Educational Improvement Organizations (EIOs), like The Tull Family Theater, that supplement public schools.

Through this program, businesses can multiply the power of their contributions by 10 times the cost to the company because they receive tax credits for up to 90% of their EITC contributions. These are actual cash tax credits, not merely deductions, to offset annual tax liabilities of $3,500 to $750,000.

To be eligible for the EITC program, a business:

    • Must be a for-profit based in Pennsylvania or authorized to do business in Pennsylvania
    • Can be an S or C Corporation, LLC or partnership
    • Must have a state tax liability of at least $3,500 for any of these taxes:
      • Personal Income Tax of S Corporation shareholders, or partners in a general partnership or LLC
      • Capital Stock/Foreign Franchise Tax
      • Corporate Net Income Tax
      • Bank, title, insurance and trust company shares tax
      • Insurance Premium Tax (excluding surplus lines, unauthorized, domestic/foreign marine)
      • Mutual Thrift Tax
      • Malt Beverage Tax
      • Retaliatory Fees under section 212 of the Insurance Company Law of 1921.

Because demand for EITC participation is great, companies that want to continue to participate in the EITC or to be added to the EITC program should apply early.

Companies submit an online application to the PA Department of Community and Economic Development, choosing to commit a certain amount of their tax liability ($3,500 to $750,000) to the EITC program for one or two years. If approved with a one-year commitment, companies receive tax credits of 75%. With a two-year commitment, they receive tax credits of 90%.

The pool of available tax credits is limited. Because so many companies are interested, EITC allotments are claimed very quickly and allocated on a first-come, first-served basis starting with submissions received May 15. Companies wishing to join the program should apply on July 1, the first application date for new businesses. Applications are accepted only until the tax credits are exhausted. 

While the dollar amount of the tax credit/EITC contribution level cannot be changed after the application, the school or EIO selected as recipients can be. Throughout the year, EIO dollars can be allocated to The Tull Family Theater. 

After companies receive state approval—generally, in the fall—they have 60 days to make a contribution to a school or EIO, such as The Tull Family Theater, and 90 days to submit proof of that contribution to the state. 

When companies file their taxes, the state will provide the tax credit for the year in which the contribution was made. Additionally, companies also may be eligible for a federal charitable contribution.

The Tull Family Theater secures EITC donations under the umbrella of the Central PA Scholarship Fund (CPSF), an EITC-accredited organization that passes through 100% of the designated funding, without cost to the Theater or to the businesses; however, The Tull Family Theater must be designated by name as the recipient. CPSF provides documentation that the company shares with the state as proof of its contribution.

CPSF serves hundreds of organizations, such as Allegheny College, Central Catholic High School and Carnegie Mellon University Children’s School, by assisting contributing businesses with applications, completing other necessary paperwork and interacting with the state—again, all at no cost.

All of the received EITC contributions support educational youth programming. The benefit to the Theater is an influx of donation dollars without the significant investment of resources and staff time typically spent on solicitations of individual donors and grant applications, enabling the Theater to dedicate more of its resources toward program development.

EITC contributions are tremendously powerful for the Theater, enabling it to provide youth programming that already has introduced thousands of children to a quality cinematic experience. These innovative educational programs:

    • Enhance the curriculum of public school academic programs
    • Supplement academic programming
    • Provide a different focus, delivery and skill training than typical public school academic programs do.

The Theater provides:

    • Exposure to current cultural topics through outreach to underserved suburban and rural youth from Allegheny, Beaver, Butler and Washington counties. This programming has enabled hundreds of students to enter a cinema for the first time in their lives. In discussions afterward, students deconstruct plots, characters, and cultural and universal values depicted in the film. They can relate the significance of relevant lessons in their own lives. Speakers and/or supplemental information enhance the experience.
    • Sensory Friendly Screenings for children and families impacted by autism and other special needs. This programming continues to open new, inclusive access to cinematic, social and cultural experiences seldom available. Sensory friendly screenings allow the entire family to watch a film together, often for the first time. These events also provide opportunities to develop life skills in a “real” setting beyond the classroom: riding the bus, purchasing tickets, selecting concessions, choosing seats and learning cinema etiquette.

By designating The Tull Family Theater as your EITC contribution recipient, your business can take pride in supporting innovative arts programming that is grounded in accessibility, whether students face physical, mental or social challenges or whether they are scaling economic and logistical issue that isolate them from the mainstream.