Educational Improvement Tax Credit (EITC)
What the EITC is
The Educational Improvement Tax Credit lets Pennsylvania businesses direct state tax dollars to education. A business contributes to an organization the Commonwealth has approved, and receives a tax credit for a portion of what it gave.
A participating business receives a Pennsylvania tax credit worth 75% of its contribution, rising to 90% when the business commits for two consecutive years. A business may claim up to $750,000 in credits per year. Contributions to pre-kindergarten scholarship organizations are credited at a higher rate.
The money funds scholarships and educational programs for students across the Commonwealth, with the program's stated emphasis on families of low and middle income.
Three kinds of organization are approved to receive contributions, and a business chooses which kind its contribution supports:
- Scholarship organizations award scholarships to students attending nonpublic schools.
- Educational improvement organizations fund innovative programs inside public schools.
- Pre kindergarten scholarship organizations award scholarships for pre kindergarten.
The program was established in 2001.
Program rules and parameters are set by the Commonwealth and can change with legislation. This page reflects the program as it operates today.
Who participates
Eligible businesses can apply directly. Most individuals and pass through owners participate through a Special Purpose Entity, usually shortened to SPE.
If you give through an SPE, you can usually receive the higher credit rate on a single year's gift. The multi year commitment sits with the entity rather than with you. Scholarship organizations manage those entities and bring in new participants as others leave, so the commitment is generally already satisfied at the entity level.
Joining an SPE means signing a joinder agreement, which makes you a participant in the entity. The SPE guide explains what that involves.
Businesses applying directly, outside an SPE, follow the standard commitment rules. A few scholarship organizations still ask larger donors for a multi year commitment. Which route fits your situation is worth a conversation.
How participation works
The program runs on the Commonwealth's fiscal year, which begins July 1.
Applying
Businesses apply to the Department of Community and Economic Development through the state's electronic application system. Two windows open each year:
- May 15. Businesses in the second year of a two year commitment, and businesses renewing after completing one.
- July 1. Everyone else, including first time applicants and businesses seeking credits beyond a commitment already under way.
Applications are processed in the order received, by the day they were submitted, and approvals continue until the year's available credits are used. Applying early in a window matters more than applying quickly within a day.
After approval
An approved business receives a notification letter from the department. Two clocks start with that letter. The contribution must be made within 60 days of it, and proof that the contribution was made must reach the department within 90 days of it.
Choosing where it goes
The business names the approved organization its contribution supports. Which organization fits a given school, and which program a school benefits from most, is usually worth a conversation.
See the organizations we work with.
How the money flows
A contribution moves through three hands before it reaches a student.
You, or the SPE you participate in, contribute to an approved scholarship organization. The scholarship organization applies the contribution to scholarships. The school awards those scholarships to students who meet the program's eligibility rules.
Scholarship organizations receive and distribute the funds; schools determine student eligibility.
FundEDU coordinates the outreach and the paperwork that gets a contribution to the right place. Contributions are never held by FundEDU, and scholarship decisions belong to the scholarship organization and the school.
Who administers the program
A scholarship organization is an approved nonprofit that receives contributions under the program and applies them to scholarships. The Commonwealth approves them and publishes the list annually.
FundEDU works with several scholarship organizations. Which one a contribution routes through usually depends on the school being supported and the relationships already in place.
Partner organizations are listed on the section overview.
If you run a scholarship organization and do not see yourself listed, get in touch. We are glad to talk about working together.
Proposed changes in Harrisburg
Pennsylvania's EITC and OSTC programs have proposed legislation before the state Senate. The current status is on the Pennsylvania Programs overview.
Last verified: 2026-08-21
