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Enacted and Began Operation 2001
| FAST FACTS |
- 44,000 scholarships in 2007-08
- 176 Scholarship Organizations
- Program total size capped at $67 million
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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 $200,000 in each year that a donation is made. The total of all tax credits awarded is limited to $67 million annually – $44 million for SOs and $22 million for EIOs. Credits are awarded to companies on a first-come, first-served basis until the cap is reached.
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| Scholarship or Voucher Value: |
Each SO determines the amount of the scholarships it distributes.
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| Student or School Participation: |
About 44,000 scholarships were awarded in 2007-08. There are 176 SOs. |
| Student Eligibility: |
Children are eligible for scholarships if their household incomes are under $50,000 plus $10,000 for each child in the family. For example, a family with one child must have an income below $60,000, while a family with three children must have an income below $80,000. 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.
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| Legal Status of Program: |
No legal challenges have been filed against the program.
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| Regulations on the Program: |
SOs and EIOs must be non-profit organizations incorporated in Pennsylvania. An SO must contribute at least 80 percent of its annual tax-credit donations to scholarships and submit annual reports, and it may not restrict its scholarships to a single school (although all of an SO’s scholarships may happen to end up at one school if all the parents decide to use them at that school). Participating schools must satisfy the requirements of Pennsylvania’s compulsory-attendance law and comply with anti discrimination laws.
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| Research on Program: |
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| News on Program: |
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| Governing Statutes: |
Act 4 amended the Pennsylvania Public School Code to establish the program. In December 2003, Act 2003-48 expanded the program.
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