PA Tax Credit Programs

Businesses and individuals that have a minimum PA tax liability of $1,000 may participate.

1. The first step is to know your PA tax liability.  Look at line 12 of your PA Form 40 to see what your tax liability was last year.

2. Contact one of the two organizations that we partner with.  They will answer any questions, ask you to join an LLC/SPE via Docusign and receive your donation check:

   1. Foundation for Catholic Education has a $1,000 minimum participation amount.  Contact Kevin Kelly. 

   2. BLOCS has a $5,000 minimum participation amount. Contact Jim Downey

There are one- or two-year commitment options: 

• With a 2-year commitment, you will receive a 90% tax credit for each year on your PA tax return.

• With a 1-year commitment, you will receive a 75% tax credit on your PA tax return.

Your net out of pocket cost is only 10% or 25% of your donation amount depending on your time commitment. If you itemize your deductions on your federal taxes, you may be able to claim the 10% amount as a donation on your federal taxes.

EXAMPLE:

If you earn at least $34,000 and have a PA tax liability of over $1,000, then you are eligible to participate.  You can see your tax liability on line 12 of the PA Form 40 that you file with the state, with your normal taxes.

The program first started for businesses in 2001.  In 2014, due to a change in the law, companies began passing through tax credits to individual donors using business entities called Special Purpose Entities (SPE's). This is a simple process that allows greater access to the program from both businesses and individuals.

Both businesses and individuals are eligible to participate if they have over a  $1,000 PA tax liability.  If you are a business owner, you can participate using both your personal tax liability and your business tax liability.

You do not need an accountant to participate in the PA tax credit program.  We have many participants who do their own taxes or use Turbo Tax.  We are happy to help you with any questions along the way.

Individuals are typically asked to write their checks in the late summer or fall.

OSTC provides scholarships to eligible Merion students residing within the boundaries of low-achieving school districts. EITC does not have residency requirements.

• Both offer a 90% tax credit.  

• Merion Mercy Academy is able to turn both donations into need-based scholarships.

If a NJ resident earns wages in PA, the wages are not considered taxable income by PA because of a reciprocity agreement between PA  and NJ.  However, if a NJ resident has a pass thru business with operations in PA, rental real estate income from a property in PA or is self employed and does business in PA, that is considered PA source income and would be taxable in PA. Therefore, they could use PA Tax credits against those types of income.  It is always best to check with your accountant if you have these special types of income.