Overview

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Tax credit contributions from caring businesses and individuals, like you, have made it possible for children all across Pennsylvania to attend the schools of their choice, such as Valley Christian School(VCS).

The Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) are tax credit programs designed to let eligible businesses and individuals designate their tax dollars to support scholarship or educational improvement organizations of their choosing (like VCS). This is one of the few opportunities you’ll ever have to direct your tax dollars to a specific destination. These donations are then put 100% towards tuition assistance.

The Benefit to Businesses

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Under these programs, a qualifying business will be approved for tax credits equal to 75 percent of its
contribution to VCS, up to a maximum of $750,000 per taxable year. The tax credit can be increased to
90 percent of the contribution to VCS if a business agrees to provide the same donation for two
consecutive years.

Furthermore, the 25 percent (or ten percent for a two-year commitment) that is not included in the tax credit may be claimed as a charitable donation on your federal income tax return.

Example:  ABC Corporation is approved to participate and donates $10,000 to VCS. They receive a tax credit for $7,500 off their PA taxes (or $9,000 on a two-year commitment). The remaining $2,500 (or $1,000) is considered a charitable donation for tax purposes.

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Your company is eligible to participate in these programs if it is authorized to do business in Pennsylvania and is subject to one or more of the following Pennsylvania taxes:

• Personal Income Tax

• Capital Stock/Foreign Franchise Tax

• Corporate Net Income Tax

• Bank Shares Tax

• Title Insurance & Trust Company Shares Tax

• Insurance Premium Tax (excluding surplus lines, unauthorized, domestic/foreign marine)

• Mutual Thrift Tax

• Malt Beverage Tax

• Retaliatory Fees under section 212 of the Insurance Company Law of 1921

• Pass-through entities, such as S-Corporations, Partnerships, LLCs, etc., can now apply the same day as C-Corporations.​

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For more details about EITC, go to http://dced.pa.gov/programs/educational-improvement-tax-credit-program-eitc/

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For more details about OSTC, go to http://dced.pa.gov/programs/opportunity-scholarship-tax-credit-program-ostc/

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The Benefit to an Individual

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The benefits for individuals are similar to that for businesses. Individuals must have a Pennsylvania tax liability (paying taxes) of at least $3,500/year, the minimum amount that administrators accept. Qualified individuals will need to participate through a Special Purpose Entity (SPE). Therefore, interested individuals should be prepared to sign a joinder committing to participation in a state-approved SPE. See the information below to learn more.

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The Next Step

If you would like to proceed with making your business or personal tax dollars benefit Valley Christian School, we receive EITC/OSTC contributions designated for VCS through three organizations: 

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• Children's Jubilee Fund

• Henkels Foundation

• BLOCS Program

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(Note:  VCS is not a separate scholarship recipient organization; rather VCS works with these groups.)

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STEP 1

Businesses:  Contact Children's Jubilee Fund at 215-233-9866, to ask questions or receive an application. Or contact the Henkels Foundation by calling JoAnne Tirpak at 215-283-7419 for information and assistance.  Or if using the BLOCS program, their one-page application found on their website (http://blocs.org/tax-credits/) can be given to BLOCS, and they will submit it for you.

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Individuals:  Contact Children's Jubilee Fund at 215-233-9866, to ask questions or receive an application. Or contact the Henkels Foundation by calling 215-283-7419 for information and assistance. Or review the online information for BLOCS at https://blocs.org/personal-tax-credits/  then contact them directly to proceed. 

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STEP 2

Businesses:  Once approved, the business has 60 days to make the charitable contribution to the Henkels Foundation or BLOCS, designating Valley Christian School as the recipient.

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Individuals:  Upon application acceptance (typically in the Fall), participants write a check to the SPE, after which 100% of the funds are directed to the Christian school designated on the application (Valley Christian School).

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STEP 3

Businesses:  Within 90 days of the letter from the DCED, the business must send proof of the contribution to the DCED. This would be written acknowledgment from BLOCS or the Henkels Foundation.

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Individuals:  After the end of the year, participants receive a form to use for purposes of tax return preparation (form RK-1) documenting the donation, and generate a PA tax credit.

STEP 4

Businesses:  The DCED will then notify the PA Department of Revenue to have the credit applied to the taxpayer’s account.

To go through the Children's Scholarship Fund, contact 215-233-9866, to ask questions or receive an application. 

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To go through the BLOCS program, go to http://blocs.org/tax-credits/ and follow the steps outlined there. 100% of donations to BLOCS designated for VCS goes to tuition assistance.

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To go through the Henkels Foundation, contact JoAnne Tirpak at 215-283-7419. The Henkels Foundation does not retain any portion of the donation for overhead and administration costs. 99% of the donation benefits VCS students, and one percent goes to the REACH Alliance (Road to Educational Achievement through Choice), the spearhead organization behind the school choice effort in Pennsylvania.