Enacted 2001 | Began Operation 2001-02
The Educational Improvement Tax Credit Program provides a tax credit on the state’s corporate income tax for contributions to Scholarship Organizations (SOs), which give private school scholarships to eligible children, or Educational Improvement Organizations (EIOs), which support innovative programs in public schools. A company may claim a tax credit worth 75 percent of its contribution. Alternatively, if it commits to two consecutive annual contributions, it may claim a tax credit worth 90 percent of its contribution. In either case, the maximum tax credit is $300,000 in each year that a donation is made. The total of all K–12 tax credits is limited to $44,466,667 in 2011–12. Credits are awarded to companies on a first-come, first-served basis until the cap is reached. The cap for 2011–12 has already been reached.
Latest Stats (2010)
- Students Participating: 40,000 (estimate)
- Active Scholarship Organizations: 238 (estimate)
- Average Scholarship Value: $1,165
Program Details
Program Type
Tax-Credit Scholarship
Scholarship/Voucher Value
Each SO determines the amount of the scholarships it distributes.
Participation
About 40,000 scholarships were awarded in 2010–11. There are 238 active SOs.
Student Eligibility
Before July 1, 2011, children were eligible for scholarships if their household incomes were less than $50,000 plus $10,000 for each child in the family. After July 1, 2011, those figures were raised to $60,000 and $12,000, respectively. For example, a family with one child must have an income below $72,000, whereas a family with three children must have an income below $96,000. Household income does not include items such as disability payments, workers’ compensation, retirement pensions, public assistance, or unemployment compensation. Some SOs have other eligibility criteria.
Legal Developments
No legal challenges have been filed against the program.
Rules & Regulations
- Income Limit: $84,000 (e.g. family of four)
- Geographic Limit: Statewide
- Enrollment Cap: None
- Scholarship Cap: Full Tuition
- Testing Mandates: None
- Credit Value: 75%/90%
- Credit Cap: Yes
- Program Cap: $44.5 million
Governing Statutes
Act 4 amended the Pennsylvania Public School Code to establish the program. In December 2003, Act 2003-48 expanded the program to include a Pre-K program.
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