Pennsylvania residents: Looking for a tax planning opportunity?
There is an alternative method for paying Pennsylvania state income tax which allows taxpayers to convert Pennsylvania income taxes into charitable contributions which benefit Pennsylvania Nonprofit Scholarship or Education Improvement Organizations. This tax treatment is accomplished by making a contribution to a program set up by a Scholarship or Education Improvement Organization to provide tuition assistance scholarships to low income families through the use of Pennsylvania’s Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC).
Participation in the program allows you to direct your Pennsylvania tax dollars towards a participating educational institution of your choice, which would generate a PA tax credit and additionally provide an opportunity to convert a potentially non-deductible state tax payment into a deductible charitable contribution for federal tax purposes.
This tax benefit has limitations, however, as it would only be beneficial on the Federal tax return to individuals whose itemized deductions will exceed the new standard deduction threshold ($12,000 for single taxpayers, $24,000 for married filing jointly).
If you are interested, a list of qualifying organizations can be found following the link https://dced.pa.gov/programs under Educational Improvement Tax Credit Program (EITC) tab.
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Kim has developed a primary focus on providing accounting, tax, and advisory services to the professional service area, including law firms and medical practices.
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