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.
Donors who participate through a Special Purpose Entity (SPE) receive a 90% Pennsylvania tax credit on their contribution.
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
Through an SPE, you do not apply to the state yourself. The SPE applies for credits on its members' behalf. The SPE guide explains how joining works.
A business can also apply directly to the Department of Community and Economic Development. DCED's OSTC page has the guidelines, the application windows and the application link.
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
