Pennsylvania's education tax credit programs
Pennsylvania lets businesses and, through Special Purpose Entities, individuals direct state tax dollars to scholarships. Two programs make up the landscape today, each with its own purpose and rules.
Program rules and parameters are set by the Commonwealth and can change with legislation. This page reflects the programs as they operate today.
Which program is which
Pennsylvania runs two tax credit scholarship programs, and there is a separate federal one. The names are close enough to confuse, so here is the short version.
| Program | Whose program it is | What it does |
|---|---|---|
| EITC, the Educational Improvement Tax Credit | Pennsylvania | Businesses and, through a Special Purpose Entity, individuals support scholarship organizations and educational improvement organizations across the Commonwealth. |
| OSTC, the Opportunity Scholarship Tax Credit | Pennsylvania | Scholarships for students who live within the boundaries of the Commonwealth's lowest achieving schools. |
| FSTC, the Federal Scholarship Tax Credit | Federal, not Pennsylvania | A separate program with its own rules and its own timeline. Read about the FSTC. |
Note that OSTC and FSTC are one letter apart and both end in "Scholarship Tax Credit." One is a Pennsylvania program, the other is federal.
Partner scholarship organizations
Pennsylvania's EITC and OSTC scholarships are administered by approved scholarship organizations. They receive the contributions and award the scholarships to families. Each one runs its own process, so the right starting point depends on your school and your situation.
- Central Pennsylvania Scholarship Fund
- BLOCS, Business Leadership Organized for Catholic Schools
- Penngift Foundation
- Children's Tuition Fund
- Scholastic Opportunity Scholarship Fund, Diocese of Pittsburgh
- Faith Builders Scholarship Services
This list is not exhaustive. If you run a scholarship organization in Pennsylvania and you are not listed here, get in touch. We would like to hear from you.
Proposed changes in Harrisburg
Nothing has changed yet. EITC and OSTC operate today exactly as this section describes, and they are unchanged for the current fiscal year.
Legislation now before the Pennsylvania Senate would fundamentally change how these programs work. It would close EITC and OSTC and replace them with a single new program beginning in the 2027-28 fiscal year. It passed the Pennsylvania House in June 2026 and now sits with the Senate Education Committee. The Senate has not voted on it.
For donors that give to scholarships, the proposal would reduce the credit. The enhanced rate available today for a multi year commitment would no longer apply to scholarship contributions, which would more than double what a donor pays out of pocket. Scholarship organizations would also be required to send a share of every contribution to the Commonwealth rather than to scholarships.
FundEDU supports the EITC. It has helped fund scholarships for Pennsylvania students for more than two decades. It is our opinion that these changes would greatly impact the number of participants, because of the increased cost, and would have severe impacts on the viability of the program.
The Senate has not voted, and the bill can move any time before the session ends on November 30. Your state senator is the one who decides.
Last verified: 2026-08-21
