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State of Innovation

State of Innovation. EITC. E ducational. I mprovement. T ax. C redit. What is EITC – “Educational Improvement Tax Credit” ??. Simply, businesses that are eligible for this program take their tax dollars that are sent to the state and redirect them t o an educational institution instead.

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State of Innovation

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  1. State of Innovation EITC Educational Improvement Tax Credit

  2. What is EITC – “Educational Improvement Tax Credit” ?? • Simply, businesses that are eligible for this program take their • tax dollars that are sent to the state and redirect them • to an educational institution instead. What type of business is Eligible ?? Any business that pays the following taxes is eligible! • Corporate Net Income Tax • Capital Stock Franchise Tax • Band & Trust Company Shares Tax • Title Insurance Company Shares Tax • Insurance Premiums Tax • Mutual Thrift Institutions • “Pass” through Taxes Newest addition

  3. Does your business pay any of the following PA Taxes? Corporate Net Income Tax Domestic and foreign corporations are subject to the corporate net income tax for the privilege of doing business; carrying on activities; having capital or property employed or used and/or owning property in Pennsylvania.  Capital Stock Franchise Tax These taxes are imposed on corporations with capital stock, joint-stock associations, limited liability companies, business trusts and all other entities classified as corporations for federal income tax purposes that were formed or do business in Pennsylvania. Bank & Trust Company Shares Tax The Bank and Trust Company Shares Tax is imposed at a rate of 1.25 percent on every bank and trust company conducting business in Pennsylvania that has capital stock.

  4. Does your business pay any of the following PA Taxes? (cont.) Title Insurance Company Shares Tax Domestic title insurance companies are subject to the Title Insurance Company Shares Tax at a rate of 1.25 percent. Insurance Premiums Tax Insurance Premium Tax is a tax on general insurance premiums. Mutual Thrift Institutions The Mutual Thrifts Institutions Tax is imposed at the rate of 11.5 percent on savings institutions, savings banks, savings and loan associations, and building and loan associations conducting business in Pennsylvania. Credit unions are not subject to tax. The Mutual Thrift Institutions Tax applies to the net earnings or income received or accrued from all sources during the tax year

  5. Does your business pay any of the following PA Taxes? (cont.) “Pass” through Taxes Subchapter S – A form of a corporation that meets the IRS requirements and that corporation would be taxed under Subchapter S of the Internal Revenue Code. This gives a corporation with 100 shareholders or less the benefit of incorporation while being taxed as a partnership. This means that any profits earned by the corporation are not taxed at the corporate level, but rather at the level of the shareholders, which is also known as an "S corporation". Having S corporation status can prove a huge benefit for a corporation. The corporation can pass income directly to shareholders and avoid the double taxation that is inherent with the dividends of public companies, while still enjoying the advantages of the corporate structure. In order to qualify, a corporation must be a small businesscorporation. This means the following requirements must be met: Must be a domestic corporation 2) Must not have more than 100 shareholders3) Must include only eligible shareholders 4) Must have only one class ofstock See attachment in packet

  6. If eligible, steps to take next……. • Determine the amount of tax credits you wish to • contribute to the educational institution • Determine where the tax credit dollars would • go, either the Scholarship Organizations or the • Pre-Kindergarten Scholarship Organizations • Refer to the applications that are supplied in this packet. The State of • Pennsylvania has made it even easier for you while saving our environment. • Click on this link and you will be able to fill out your application of choice, • on-line if that is your preference. • 2011 EITC Program w/ applications

  7. steps to take next……. continued • Information that may need your accountant’s • assistance. • Selections for your tax credit dollars, 2 year selection gives you the best return

  8. steps to take next……. continued • Review this information carefully so that you do • not miss the deadline according to the dates • posted. One thing to remember, once you have • filled out your application, you still have a • option to change your mind, even after you have • received your letter of approval from the state.

  9. The final step…. • Return your completed application to • Wilson Christian Academy, it will be hand • delivered to Harrisburg on July 1st. Mail To: Attention: Dan Seale

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