Pennsylvania Revises EITC and OSTC Credit Guidelines for 2020

As a result of circumstances surrounding the ongoing COVID-19 pandemic, Pennsylvania has enacted numerous changes to the Educational Improvement Tax Credit (EITC) and the Opportunity Scholarship Tax Credit (OSTC) programs for 2020.

EITC and OSTC Changes Include:

  • The deadline to make required EITC and OSTC contributions has been extended until the business entity’s tax year-end. Prior guidelines granted 60 days from the date of the application approval letter. If the business did not make its contribution before its year-end, however, the offer is rescinded.
  • Businesses entering the second year of their two-year commitment in 2020 are now permitted to donate a lower amount in year two and still retain the 90% contribution tax credit for both year one and year two. 
  • EITC tax credits are to be applied against the Corporate Net Income tax liability in the tax year in which the contribution is made. In November 2020, however, Pennsylvania issued guidance allowing firms that cannot use tax credits awarded during the 2020-21 or 2021-22 fiscal years to carryforward those credits for two years. 
  • Any business unable to receive its EITC or OSTC approval letter due to remote working status can request an electronic copy via the Tax Credit Division.

Please consult your state and local tax adviser if you have any questions with regard to either the EITC or the OSTC. 

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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

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