Providing scholarships for deserving Catholic School students of the Diocese of Allentown through Pennsylvania s Educa

1. Providing scholarships for deserving Catholic School students of the Diocese of Allentown through Pennsylvania’s Educational Improvement Tax Credit And Pre-Kindergarten EITC Program The Eastern Pennsylvania Scholarship Foundation has been providing need-based partial scholarships to deserving students in the Catholic schools of the Diocese of Allentown for the past three school years. We are able to do this because of Pennsylvania’s Educational Improvement Tax Credit program which was signed into law by former Governor Ridge in 2001. The law allows tax credits to companies who make donations to either a scholarship or educational improvement organization or both.The Eastern Pennsylvania Scholarship Foundation has been providing need-based partial scholarships to deserving students in the Catholic schools of the Diocese of Allentown for the past three school years. We are able to do this because of Pennsylvania’s Educational Improvement Tax Credit program which was signed into law by former Governor Ridge in 2001. The law allows tax credits to companies who make donations to either a scholarship or educational improvement organization or both.

2. It probably kills most of you to have to write that check to the state for your company taxes. What’s great about the Educational Improvement Tax Credit program is that instead of writing that check to the state, you can donate that money to a scholarship organization and receive a tax credit toward your taxes. What a win-win! Deserving families get scholarship assistance and your company’s tax money stays in your local community. It probably kills most of you to have to write that check to the state for your company taxes. What’s great about the Educational Improvement Tax Credit program is that instead of writing that check to the state, you can donate that money to a scholarship organization and receive a tax credit toward your taxes. What a win-win! Deserving families get scholarship assistance and your company’s tax money stays in your local community.

3. EITC Background Established in 2001 via Act 4 which amends Pennsylvania’s Public School Code to provide for the establishment of the Educational Improvement Tax Credit Program. Allows for tax credits to companies who make donations to state-approved scholarship foundations for students in grades K-12 and educational improvement organizations.

4. Pre-Kindergarten Educational Improvement Tax Credit Program Established December 22, 2003 Allows for scholarships for 3 and 4 year olds attending preschools aligned with elementary schools. Program began July 1, 2004 To make a great program even better, in December of 2003, the legislature amended Act 4 and expanded EITC to include a pre-Kindergarten scholarship program and funded it with $5 million annually, bringing the total annual funding for Educational Improvement Tax Credit Programs to $45 million. Let’s briefly review both the EITC and the PKTC programs. To make a great program even better, in December of 2003, the legislature amended Act 4 and expanded EITC to include a pre-Kindergarten scholarship program and funded it with $5 million annually, bringing the total annual funding for Educational Improvement Tax Credit Programs to $45 million. Let’s briefly review both the EITC and the PKTC programs.

5. State Funding $30 million for first two program years $20 million for scholarships $10 million for educational improvement programs $75 million for the 2007-08 program year $44.7 million for scholarships $22.3 for educational improvement programs $8 million for Pre-K scholarships Since 2001, state funding for this popular program has increased by $45 million.Since 2001, state funding for this popular program has increased by $45 million.

6. March 15, 2004 The Milton and Rose D. Friedman Foundation, a preeminent national organization devoted to promoting educational freedom, ranked Pennsylvania’s EITC program 3rd best in the nation for providing educational choice and gave the EITC program a B+ among school choice programs. Pennsylvania is truly fortunate to have a program like EITC available to our schools. Pennsylvania is truly fortunate to have a program like EITC available to our schools.

8. To Be Eligible Companies Must Pay at least one of the following taxes: Corporate Net Income Tax Capital Stock Franchise Tax Bank and Trust Company Shares Tax Title Insurance Companies Shares Tax Insurance Premiums Tax Mutual Thrift Institutions Tax

9. EITC Options (K-12 Program) For a two-year commitment to the program, a company can receive a 90% tax credit up to a maximum credit of $200,000. For a one-year commitment, a company can receive a 75% tax credit up to a maximum credit of $200,000. A tax credit may not exceed the company’s tax liability.

10. PKTC Program (Preschool) A company can receive a 100% tax credit for a $10,000 donation and a 90% tax credit for any additional amount up to $100,000 for a taxable year. There is no 2-year commitment requirement. A tax credit may not exceed the company’s tax liability.

11. EITC Program Guidelines  The Department of Community and Economic Development issues the Business Guidelines and Application for the Educational Improvement Tax Credit program. The Department of Community and Economic Development issues the Business Guidelines and Application for the Educational Improvement Tax Credit program.

12. Application A one page application is all it takes to apply for an Educational Improvement Tax Credit.A one page application is all it takes to apply for an Educational Improvement Tax Credit.

13. Application

14. EITC Application Process A company applies for a tax credit through the EITC one-page application for scholarship organizations, Appendix I – SO or Appendix I – PKSO. An approval letter from the Department of Community and Economic Development is sent to the company usually within 7-14 days. The donor has 60 days from the date of its approval letter to make its contribution to the Eastern Pennsylvania Scholarship Foundation. When designating a school or group of schools for its contribution, the company includes a letter with its donation stating its wishes. EPSF sends a receipt letter to the company which the company sends to the DCED as proof of donation. Process is completed.

15. I’d like to tell you a little about the Eastern Pennsylvania Scholarship Foundation.I’d like to tell you a little about the Eastern Pennsylvania Scholarship Foundation.

16. Eastern Pennsylvania Scholarship Foundation (EPSF) Established in 2001 to accept EITC scholarship donations for the Diocese of Allentown Catholic Schools In 2004 EPSF became a Pre-K scholarship organization. Board of Directors being established. Mrs. Barbara Ann Shotwell is the Administrator. Donations for scholarships can only be made to state-approved scholarship foundations or educational improvement organizations. EPSF is the foundation for the Catholic schools of the Diocese of Allentown. Donations for scholarships can only be made to state-approved scholarship foundations or educational improvement organizations. EPSF is the foundation for the Catholic schools of the Diocese of Allentown.

17. EPSF Guidelines 100% of the scholarship donations collected are distributed in scholarships. Donors expressed wishes are always followed as long as they do not conflict with state and foundation guidelines. Lowest income families are served first. Individual schools determine the scholarship amount for each student. Oversight and compliance to Act 4 is determined and provided by EPSF.

18. Latest EPSF Statistics Range of scholarship donations given by companies to our foundation is $1,000 to $150,000. 97% of all donations are restricted to specific schools or areas of the diocese. Schools received between $1,000 and $135,000 per year for scholarships. Average individual scholarship awarded for the 2006-07 school year was $623 for elementary students and $1,111 for high school students.

20. EITC Scholarship Eligibility Grades K-12 Private School For a single parent with one child with a family income of $50,000 or less qualifies. Add $10,000 for every household dependent. Must consider all household income.

21. PKTC Student Eligibility Pre-Kindergarten Students 3 or 4 years old For a single parent with one child with a family income of $50,000 or less qualifies. Add $10,000 for every household dependent. Must consider all household income.

22. Exemptions Disability payments Retirement and workers’ compensation Public assistance, unemployment compensation Social Security, income of U.S. Servicemen serving in a combat zone

23. Resources Mrs. Barbara Ann Shotwell, Administrator, Eastern Pennsylvania Scholarship Foundation 610-871-5200 Ext. 240 or bshotwell@allentowndiocese.org Department of Community and Economic Development website: www.newpa.com REACH Foundation website: www.paschoolchoice.org