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PA DCED Issues Guidelines on Opportunity Scholarship Tax Credit Program

State and Local Tax

By Matthew Dodge

The Pennsylvania Department of Community and Economic Development (“DCED”) has issued guidelines on the new Opportunity Scholarship Tax Credit Program (“OSTC”).

The OSTC is a new program for fiscal year 2012-2013 and provides tuition assistance to students in the poorest-performing 15% of public schools and tax credits to businesses that contribute to Opportunity Scholarship Organizations. The program has $50 million in funding for the current fiscal year.

Businesses are able to submit applications to DCED on August 8, 2012. Applications are made through the DCED’s electronic single application system and are processed on a first-come, first-served basis. Applications will be accepted and approved until the program’s funding is exhausted. Businesses making contributions may be approved for tax credits equal to 75% of their contribution for one year and 90% if they commit to contributions in consecutive years. A business is eligible for up to $400,000 in OSTC program tax credits for fiscal year 2012-2013.

Organizations that wish to apply to be an approved Opportunity Scholarship Organization must be a non-profit entity, exempt from federal tax under section 501(c)(3) of the Internal Revenue Code and contribute at least 80% of annual OSTC receipts to a qualifying opportunity scholarship program. The application process for an organization is detailed in the guidelines from the DCED’s website.

Parents and students interested in the program should check the DCED website for eligibility based on income levels and school district. Approved Opportunity Scholarship Organizations will be added to the website once approvals commence. 

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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

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.

© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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