Opportunity Scholarship Tax Credit (OSTC)
What the OSTC is
The Opportunity Scholarship Tax Credit is a Pennsylvania program that funds scholarships for students who live within the attendance boundaries of the Commonwealth's lowest achieving schools, so a family can choose a school that better fits their child. 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.
OSTC sits alongside the EITC. Where the EITC supports scholarships and educational programs broadly, the OSTC is aimed specifically at students assigned to the Commonwealth's lowest achieving schools.
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. 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, and approvals continue until the year's available credits are used. OSTC credits are limited, so applying early in a window matters.
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.
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 opportunity 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
An opportunity 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.
Partner organizations are listed on the section overview.
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
