Tax Credits

Deserving MPS students benefit from your tax credit donations at a cost to you of 10 cents on the dollar!

Eligible businesses and individuals can participate in these incredible and proven 90% tax credit programs that have been creating MPS scholarships for local families for years.

Individuals

This is an opportunity for you to donate to MPS scholarships for 10 cents on the dollar by literally redirecting the 2021-2022 PA personal income tax you have to pay to the state, to instead be used to help MPS students who meet state guidelines for financial need.

I’m happy to support MPS through the PA personal income tax credit program. Honestly, it’s a no brainer! I like to refer to it as magic money. I write a check that provides MPS scholarships, and I receive 90% of it back in my state tax return. It’s that easy!

David Geiger ’87
Personal Income Tax Credit Participant

Practical example using $10,000 to illustrate the math:

  • You estimate you owe at least $10,000 in PA state income tax.
  • Instead of writing the check to Harrisburg, you write the check for $10,000 to a special purpose entity (SPE) that has been set up for the sole purpose of collecting MPS scholarships through this program. This is a two-year commitment with equal amounts due each year.
  • All funds collected in the SPE each year are donated to MPS for scholarships and awarded to qualifying students within one year.
  • You receive a state K-1 form to confirm your donation and your 90% state tax credit due. You also receive a federal K-1 which may provide a federal benefit.
  • At tax time, you subtract your $9,000 credit (same as cash payment) from your PA state income taxes due.
  • Qualifying MPS students receive 100% of the scholarships for the next school year.
  • Note: The SPE makes the application to the state, and handles all of the paperwork. You don’t have to.

Timeline

This is a two-year commitment with equal donations being made both years.

  • Because of a COVID-19 extension, the first payment this year can be paid as late as December 1, 2021.

Please contact us right away if you are interested so we can reserve your credits.

  • Assuming that COVID changes are no longer in place, the second payment would be due no later than March, 2022.

**For more information please contact MPS Advancement Director Lisa Nietupski at lznietupski@mpslakers.com or 814.824.2408.

**Mercyhurst Preparatory School recommends that you contact your personal financial advisor to be sure that you are eligible to receive the tax credits.

Thank you for your consideration.

 

Q&A

Who may be eligible?
Pennsylvania residents who draw a salary from a for-profit Pennsylvania business, (or draw a salary from an out of state for-profit business authorized to do business is PA, and are subject to PA tax).

OR

Retirees, sole proprietors, and non-profit employees who are PA residents, ONLY if they own (at least one share of) stock in a PA company, and owe PA personal income taxes.

OR

Pennsylvania residents who are partners/members in a general partnership, limited partnership, Limited Liability Partnership, or Multi Member Limited Liability Company.

Who is NOT eligible?
People whose legal residence is outside of Pennsylvania.

Also, sole proprietors, single member LLCs (who file a Schedule C), and retirees, with the exception of those who own at least one share of stock in a PA company, who owe PA personal income taxes.

To whom is the payment made?
The payment is made to Mercyhurst Prep Scholarship #2, LLC.

The entity was established by a member of the MPS Board of Trustees for the sole purpose of collecting scholarship donations for Mercyhurst Preparatory School through PA EITC (Educational Improvement Tax Credit) program. The program provides scholarships to MPS students who qualify for the assistance financially according to PA state guidelines.

Each “member” is provided a PA schedule K-1 indicating the 90% PA tax credit, as well as a Federal K-1 which could provide a federal benefit.

When can the credit be used?
The credit can be used in the year of contribution.

How much can I donate?
A minimum of $1,000 per year with a required commitment of two years.  The maximum is the amount you (and a spouse) owe on your joint PA state income tax return. (Our current donors give between $1,000 and $30,000 a year.)

What happens if I qualify now, but my situation changes before the next year’s commitment is due?
You are making a two-year commitment so it is your responsibility to retain your eligibility to get your 90% tax credit.

Can the credits be carried back or forward, or be refunded?
The credits cannot be carried back or forward, and are not refundable.

Businesses

Qualifying business owners who make a two-year commitment receive a 90% Pennsylvania business tax credit.

Mercyhurst Prep is an approved K-12 Scholarship Organization (SO).

Our current business donations range from $2,000 to $80,000 per year.

Business can apply to the EITC (Educational Improvement Tax Credit) and/or OSTC (Opportunity Scholarship Tax Credit) programs.

Businesses must submit an online application for the tax credit through the DCED website. If approved, the business has 60 days to make its donation.

The program is simple. For example, if an approved business owner with a tax liability of $20,000 chooses to donate that amount to Mercyhurst Prep, it translates into a mere $2,000 tax bill.

$ 20,000 100% of your donation to MPS scholarships
– 18,000 90% tax credit deducted from your tax bill
$ 2,000 Taxes owed

“PNC participates in Mercyhurst Prep’s Educational Improvement Tax Credit Program because we believe in the transformative power of access to high-quality education. It makes perfect sense for our organization to participate in this program with an institution like Mercyhurst that prioritizes making life-changing learning opportunities accessible to every student.”

Jim Stevenson
Regional President for PNC Bank in Northwestern Pa.

Eligibility

Businesses authorized to do business in Pennsylvania who are subject to one or more of the following taxes:

  • Personal Income Tax
  • Capital Stock/Foreign Franchise Tax
  • Corporate Net Income Tax
  • Bank Shares Tax
  • Title Insurance & Trust Company Shares Tax
  • Insurance Premium Tax (excluding surplus lines, unauthorized, domestic/foreign marine)
  • Mutual Thrift Tax
  • Malt Beverage Tax
  • Retaliatory Fees under section 212 of the Insurance Company Law of 1921

Mercyhurst Prep Lakers who depend on these valuable scholarships are blessed that the Commonwealth of Pennsylvania offers these tax credit programs.  MPS is very grateful to participating businesses.

**For more information please contact MPS Advancement Director Lisa Nietupski at lznietupski@mpslakers.com or 814.824.2408.

**Mercyhurst Preparatory School recommends that you contact your personal financial advisor to be sure that you are eligible to receive the tax credits.

Thank you for your consideration.

What a fantastic program!  The OSTC tax credit program helps everyone:  needy, deserving students from poorly performing schools receive a top-notch high school education; the participating school, in my case Mercyhurst Prep, achieves greater diversity in its student body; and the business donor receives more tax relief from the State and Federal governments than the donor gives.  What could be better than a win, win, win?”

Alan Hannibal
Owner – Composiflex