The Friends Education Equity Collaborative Tax Credit Program
INCREASING ACCESS TO FRIENDS EDUCATION FOR MORE FAMILIES
Stratford Friends School is a member of the Friends Education Equity Collaborative, a Special Purpose Entity LLC formed in 2016 to secure tax credits offered through Pennsylvania’s popular EITC and OSTC tax credit programs.
The EITC and OSTC programs were previously only open to corporate donors, but with the formation of organizations like The Collaborative, qualified individuals now have the opportunity to receive tax credits while supporting schools like SFS.
The purpose of The Collaborative is to foster the growth of Quaker Education by providing funding that makes a Quaker education accessible for more families. The Collaborative is comprised of over 15 Quaker schools and counting and the Friends Council on Education.
What’s in it for me?
- You have the ability to direct all or some of your PA state income tax liability to SFS. SFS will, in turn, use your gift to provide critical financial aid to students in need.
- You will receive a tax credit equal to 90% of your contribution to The Collaborative. In addition, you may be able to claim a federal income tax deduction for a portion of the contribution. Together, these benefits make a large gift very inexpensive to make.
How does it work?
- Qualified individuals become members of The Collaborative.
- You agree to make a set contribution to The Collaborative roughly equal to your anticipated state annual income taxes plus 10%, for two consecutive years.
- You receive a tax credit each year for 90% of the amount of your contribution (which is roughly the amount of your anticipated taxes).
- You take a charitable deduction from your federal taxes for the difference between your contribution to The Collaborative and the 90% tax credit you received (if you itemize your deductions).
- On the receiving end, The Collaborative makes a gift of your funds to the Friends Council on Education, which distributes them to SFS and other member schools. The Collaborative then sends you a tax form allocating the state income tax credits to you.
The collaborative identified the following two people as points of contact to answer questions.
Friends Education Equity Collaborative c/o ABS, PO Box 254, Oreland, PA 19075
For more information contact: Advancement@stratfordfriends.org
Pennsylvania’s Educational Improvement Tax Credit Program
Pennsylvania’s Educational Improvement Tax Credit program enables businesses to reduce their state tax liability by earning credits in exchange for a donation to support need-based scholarships. Stratford Friends School is an approved scholarship school.
EITC provides companies with a 75% tax credit for donations to approved educational scholarship organizations. The tax credit increases to 90% if a company commits to making the same donation for two consecutive years. A business paying qualifying taxes in PA can receive up to $750,000 in tax credits annually. The state government allocates tax credits for education programs each year on a first-come, first-served basis until the credits run out.
Who is Eligible to Participate?
The EITC program is available to businesses that file as S-Corporations, Partnerships, LLs or C-Corporations. Eligible taxes to which credits can be applied include:
- Corporate Net Income Tax
- Capital Stock Franchise Tax
- Bank and Trust Company Shares Tax
- Title Insurance Company Shares Tax
- Insurance Premiums Tax
- Mutual Thrift Institutions Tax
- Personal Income Tax of S Corporation shareholders
- Personal Income Tax of partners in general or limited partnerships
How to Participate in EITC
Participation is easy:
- You or the company you work for complete a single-page online application (a first-time registration and login is required). Information and the application can be found here on the DCED website.
- After submitting the online application, submit the signature page to the DCED via US mail.
- Upon receipt of your approval letter from the DCED, you have 60 calendar days from the date of the letter to make a contribution to Stratford Friends School. Please send your check to the Advancement Office at SFS, 2 Bishop Hollow Road, Newtown Square, PA 19073.
- Upon receipt of your contribution, we will send you an acknowledgment letter. Simply mail a copy of this acknowledgment to the DCED as proof of your contribution within 90 days of the date of your approval letter.
- After receiving proof of the contribution, the DCED notifies the Department of Revenue, which applies the tax credits against the appropriate taxes identified in the application.
The Benefits of Participating in EITC
There are several benefits to participating in EITC:
- Reduce your corporate state tax burden
- Take a charitable giving deduction on Federal taxes
- Provide tuition aid for financially in need students!
Since the EITC program was established in 2001, it has accomplished several things:
- Provided an easy way for the business community to be more involved in education
- Provided a lifeline to struggling families who wish to educate their children to a nonpublic school
- Provided the best possible return on investment: A child’s future has been enhanced.
If you have questions about participating in the EITC program, please contact our advancement office at 610-355-9580, firstname.lastname@example.org.