AUGUST NEWS

PA AMENDS EDUCATION TAX CREDITS

Pennsylvania has amended the education income tax credits. The credits impacted are the “Educational Improvement Tax Credit (EIT) and the Opportunity Scholarship Tax Credit (OST).

What changes are made regarding awarding of credits?

If all tax credits for contributions are not awarded by November 30th, then applications will be accepted through the end of the fiscal year. The limitations on the maximum credit a business can receive during the fiscal year will be lifted. The credits will be awarded on a first-come, first-served basis until the total available is used up.

What are the new amounts for the EIT program?

The total aggregate amount of all tax credits approved for contributions from business firms to scholarship organizations, educational improvement organizations and pre-kindergarten scholarship organizations in the EIT are increased from $125 million to $405 million. The law increases the total amount that can be used to provide tax credits for scholarship organizations from $175 million to $263 million. The total amount for Educational Improvement Organizations increases from $37.5 million to $44.5 million. The total amount for pre-kindergarten scholarship organizations increases from $12.5 million to $20.5 million. Further, no less than $12 million of the total aggregate amount must be used to provide tax credits for contributions from business firms to increase scholarships for students attending economically disadvantaged schools.

What are the new amounts under the OST program?

The amount of tax credits available under the OST program increases from $55 million to $65 million.

Client Line

Pennsylvania has enacted a Child and Dependent Care Enhancement Program 

What is the credit? 

• For tax years beginning after December 31, 2021, a taxpayer who receives a credit under IRC Sec. 21 can claim a Pennsylvania personal income tax credit.

What is the amount of the credit? 

• The amount of the credit is equal to 30% of the actual amount of employment-related expenses incurred by the taxpayer and claimed for the federal credit during the prior tax year, or the following, whichever is less. $3,000 for one qualifying individual with respect to the taxpayer or $6,000 for two or more qualifying individuals with respect to the taxpayer; multiplied by the applicable percent [as defined by the IRC sec 21] for the taxpayer in effect for the tax year beginning after December 31, 2021, and ending before January 1, 2023.
• The tax credit is refundable but it cannot be carried forward, carried back, sold, assigned or transferred.

SUMMER HOURS

As a reminder, our office is currently open from 8:30 AM – 4:30 PM on Monday through Thursday, and from 8:30 AM – 1:00 PM on Friday. 

We will resume our normal hours after Labor Day.

Our office will be closed on Monday, September 5, 2022, in

honor of the working people of the USA. 

Stay safe and enjoy the long holiday weekend.