Could Federal Tax Reform be a Game Changer for PA's EITC Program Participation?
January 24, 2018
PA allowed, and still does, a 90% tax credit against your state income taxes by making a two-year commitment to the program. Say you were willing to donate $10,000 annually for two years. You get a $9,000 tax credit and get $10,000 to the institution(s) of choice for a cost of $1,000. That, in and of itself, is pretty awesome. However, it can be even better with the new federal tax bill.
As you may know, starting in 2018 state and local income taxes combined with real estate taxes are subject to an annual deduction cap of $10,000 for individuals. You may have read and heard how people were rushing to pay such taxes by the end of 2017. For someone who will continue to itemize their deductions (in lieu of claiming the IRS standard deduction), a charitable deduction in lieu of paying state income taxes may become quite valuable. In fact, it's possible that the 90% PA tax credit combined with the federal tax benefit of making the contribution (vs. paying additional state income taxes) could EXCEED the cost of your donation.
This program (along with the one that businesses can still support) is critical to helping families in need of some tuition assistance. It's a simple 10-minute process to participate and we can provide more detail.
Applications are being accepted now with payments being deferred until the fall. You may want to act before credits run out.
Contact Bill Richardson at 412.594.7708 or firstname.lastname@example.org with questions.