EITC & OSTC Tax Credit Programs

Substantial tax credits are available to eligible businesses contributing to a Scholarship Organization, an Educational Improvement Organization, and/or a Pre-Kindergarten Scholarship Organization. Pennsylvania has created two programs to allow businesses to support their local schools, families and students with their tax dollars:

  • Educational Improvement Tax Credit (EITC)
  • Opportunity Scholarship Tax Credit (OSTC)

The funds contributed through these programs are used to provide scholarships for HMS families and students. We are very grateful to the many different businesses who give generously to HMS through these scholarship programs each year and help provide need-based scholarships to over half of the current HMS students!

How can I participate in these programs?

Businesses and individuals meeting the state criteria can apply for tax credits then make a contribution to an approved Scholarship Organization, identifying the school of their choice to utilize the contribution as scholarship funds.

Check out this fact sheet or the PA School Choice website for more program and application information.

What is the process?

  1. Apply online. Use the PA Department of Economic Development (DCED) website and their online application. Your tax professional can assist with this process.
  2. Receive your approval letter from the PA DCED.
  3. Make your approved contribution within 60 days to a qualifying scholarship organization, such as:
    • Pennsylvania Mennonite Scholarship Organization (PA-MSO)
    • Faithbuilders Scholarship Organization
    • other scholarship organizations chosen by you and your tax professional.
  4. Designate any portion of your annual contribution to benefit students from Hinkletown Mennonite School when you make your gift.
  5. Provide proof of the contribution from the scholarship organization to the state in a prompt fashion following your contribution.

Special Purpose Entities

Some business leaders and those who may not be able to receive tax credits through the traditional business application are seeking to do so through new Special Purpose Entities. Feel free to contact HMS Director of Advancement Jody Fausnight with questions regarding this growing popular tax credit option.

For More Information:

  • Contact HMS Director of Advancement Jody Fausnight at jfausnight@hinkletownschool.org or 717-354-7100 x1005.
  • Check out the PA Department of Economic Development website for information on the EITC program and the OSTC program.
  • Talk to your tax professional about how this program could benefit your business as well as the families & students in our community.

Current Notes for Program Participants – December 2018

If you participate in the program, here are a few general observations to help keep you on track:

  • Past participants: If you applied for tax credits prior to July 1, 2018, should have already received your approval letters. If you haven’t received yours, please contact DCED (Dept. of Community & Economic Development) to determine what portion of your application or tax compliance has been unverified.
  • First-time applicants: Only about 5% of first-time applicants (applying July 1, 2018 or later) have received approval letters to date. These application decisions  are reviewed & approved on a rolling basis. They are based on available funds and often get held up administratively at DCED.
  • New requirement for tax compliance verification: This is causing some hiccups for program participants. Both repeat participants and newcomers are discovering that the compliance verification paperwork is sometimes missed or incomplete and sitting in the cue at DCED. If you have not received your approval letter, you or your tax professional may contact DCED to determine if something is missing.
  • One encouragement: The program has $20 million in increased tax credit funding available for 2018-19. More businesses and individuals will be able to support their community schools through EITC/OSTC.

For more information about the many ways to support HMS, contact Jody Fausnight, HMS Director of Advancement, at jfausnight@hinkletownschool.org or by calling 717-354-7100 x1005.