EITC at the JASP
If given a choice of either sending a check to Harrisburg to pay for taxes on your business earnings OR making a donation to the Japan-America Society of Pennsylvania to support students receiving Japan-centered educational programs in area schools, which would you choose?
You have such a choice through the Educational Improvement Tax Credit program (EITC)! Click here to see our EITC brochure.
Talk to your employer about receiving state tax credits for contributions to the JASP supporting our Japan in the Schools program. It's quite simple:
- Send your one-page application to the JASP by June 15, 2013. The JASP will submit all of the applications to the Pennsylvania Department of Community & Economic Development.
- Applications can be found at www.newpa.org/eitc. Click on the link under guidelines.
- Upon approval, make the company's donation to the JASP.
- Receive a credit to offset business tax liability equal to 75% of the contribution for one year, or a credit equal to 90% of the contribution if company commits for two years (annual maximum of $300,000).
- Entire contribution may be deducted 100% against federal net income, allowing the donation to cost the business nothing.
Recently passed legislation now makes all businesses eligible to participate in EITC. Prior to this change only companies owing Capital Stock Franchise Tax, Corporate Net Income, and Bank and Trust Company Shares Tax were eligible to offset with EITC. New to this year, EITC can offset Personal Income Tax of S-corporation shareholders, partnerships and limited liability company members. So whether you work for a major corporation or you own your own small business, "pass-through" entities can receive the credit.
The EITC program is a great way to ensure that your tax dollars support the things you care about! Please consider donating to the JASP today.
FAQs
Q: What businesses qualify to participate in the EITC?
A: Any business:
- C-Corporations
- Subchapter-S Corporations
- Partnerships
- Sole Proprietorships
- Limited Liability Companies that pay any of the following Pennsylvania 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
· Personal Income Tax Liability for S-Corp Shareholders
Q: Why are tax credits more attractive than a standard charitable donation?
A: While deductions reduce your amount of taxable income, tax credits reduce your actual tax bill, dollar-for-dollar. Tax credits are utilized AFTER your tax liability is established.
Q: How much of a tax credit can I get for my business through EITC?
A: The tax credit (against taxes owed) is equal to 75% of the contribution for one year. However, if a company makes the same commitment for two consecutive years, the credit becomes 90% for each year. Eligible companies may take up to $300,000 in tax credits per year. In addition, full charitable deductions still apply with this contribution (including federal tax filings), increasing the value of the tax credit.
Q: Is it a complicated process for businesses to receive the tax credit?
A: Not at all.
- The application is just one page, which you submit to the PA Department of Community & Economic Development.
- Based on available funding and presuming the company does not owe back taxes, DCED will send an approval letter to the applicant.
- Upon approval from DCED, the company then has 60 days to make its donation designated for the Japan-America Society of Pennsylvania through:
Japan-America Society of Pennsylvania
600 Grant Street
Suite 444
Pittsburgh, PA 15219-2703
Acknowledgement from the JASP will be provided to business, which then has 90 days to send proof of its donation to DCED. |
